The home was a bank owned, single family ranch listed for $75,000. This was an “absolute auction”, which means the house would be sold to the highest bidder regardless of the price in its AS-IS condition with no buyer contingencies and the buyer had to close within 30 days plus a 10% buyers premium that would be added to the final bid price. Bidders had to show up with a $5,000 deposit in form of a cashier’s check. The auction was to take place at the house at 5PM.

My client and I arrived at the house at 4:30. There were several people going in and out of the house looking around and scoping out the other bidders. (If you are a people watcher, you would love this event) The auctioneer was set up in the house where we went to register to bid. My client gave the auctioneer the $5,000 check with photo ID and we were assigned a number to bid along with the purchase contract that would be used for the highest bidder. We were told the auctioneer would go over the purchase contract line by line right before the bidding began.

Promptly at 5 the auction began. There was about 50 people standing in the house and there were 20 registered bidders. The auctioneer went over the purchase agreement and disclosed a few defects he knew about the house. Then the bidding began. It started at $50,000 and immediately was bid to $60K, then $70, then $80, then $90 where the bidding paused for a moment and the auctioneer was asking for $100. He looked and called a few times, then a shout of $92.5, followed by $95. Then the auctioneer made some comments to lighten the tension and remind people that this price is much lower than the average sales in the area. The a shout came out at $100K. Then $101K. A pause for a few moments and then $102K. The auctioneer called for $103K, but that is where it stopped. “$102,000 going, once, twice, SOLD”. The event was over at 5:23 and another house was Sold in Worthington, Ohio. Does anyone have an auction experience they would like to share? Please contact me if you are interested in learning more about auctions in Central Ohio.

I had a tenant that was a “pack rat” and every time I would go to his apartment, I would tell him he had to get rid of his junk to ensure his apartment was in safe and sanitary condition. He would always say, “OK Pat, I am just so busy with work, but I will get to it.” Things did get a bit better, but the apartment was still cluttered with old newspapers, magazines, junk, etc). My gut was telling me to increase his security deposit or do something to force him to get all the clutter out. “Man you don’t want to get stuck with all of this.”, my gut would say. Then the day came that he decided he was going to move to another part of the country. I told him to make sure he got all of his personal belongings and debris out to ensure he got his security deposit back.

I then got the call that said, “Come on down Pat. I got the place all cleaned up it looks real nice.” As I was driving up to the apartment, I began to realize I should have listened to my gut. I guess not only beauty, but clean is also in the eye of the beholder. Take a look below. How expensive of a life lesson do you think this was? Do you think he got his security deposit back? What do you think?

From time to time I am going to write about Real Estate Economics to help shed some light on many of the different topics and terms we are hearing and seeing to help give you a perspective as to what is “really going on” despite what you read or hear about in the media.  We will explore topics such as:

What is a “Buyer’s Market”?

Where are all the Buyers?

What is a “Seller’s Market”?

Why do people Buy High & Sell Low when we are taught to Buy Low and Sell High?

Can you time the market to Buy at the absolute Bottom and Sell at the absolute Peak?

How did we get in this mess in the first place?

I would encourage anyone to post comments or ask questions to any real estate topic.  I will be more than happy to give you my opinion and perspective.  If I don’t know, I will do my best to get the question to the appropriate person for an accurate answer.

Coming soon, we will examine “It’s a Buyer’s Market, so where are all the Buyers?”  Please post any comments of suggestions or topics you would like to see.