In all my years of being a Realtor, and through the Great Recession of 2008-2014, I have never attended a foreclosure auction. That is, until this morning. It was pretty interesting.
I attended because of the circumstances of a friend. This is also a bit of a cautionary tale about the pitfalls of selling by owner and not using a Realtor. Prior to meeting me, this friend sold a condo here in Lake Oswego by owner. At the closing table, literally as she and her husband were signing the documents, it appeared on their settlement statement a charge to the Home Owner’s Association in excess of $20,000 for a special assessment. This should have been found out WAY before getting to the closing table. A good Realtor would have addressed this before even taking the listing. In any case, they were motivated to close on time and so agreed to take a promissory note from the buyer for the amount of the assessment with the agreement that the buyer would make payments to them to pay it back. The buyer failed to make the payments. She also failed to make the payments to her mortgage company and this condo was auctioned at the Clackamas County Courthouse this morning. My friend and I were both curious about the proceeding and so went to the auction.
I had heard it happens on the Courthouse steps. It’s snowing this morning and that may explain why it happened in the foyer of the Courthouse, just inside the front door. It’s so bizarre! People are coming and going and walking right through the proceedings.
We got there early and a small group of about 12 people gathered in wait. At precisely 10am a court clerk wheeled a small cart out into the hall with a sign that read “Sheriff’s Auction of Foreclosure”. She had a stack of 5 small files, one for each property being auctioned. She asked if any one wanted to register. Most of those gathered did. They approached the cart and pulled out cashier’s checks to show that they had certified funds to pay cash on the spot for the properties that they intended to bid on. Then the auction began.
It went really fast. 4 of the 5 properties received no bid and went to the bank who’s court proceeds of foreclosure seemed to also work as their bid on the properties. One house in West Linn was the deal of the day. It sold with one bid for $131,300, not to the bank that held the mortgage, but to a guy in a sweater and blue jeans who is probably an investor.
There was something very old West about the experience.
The guy who got the house in West Linn is taking a big risk. You have to have cash on the spot and you usually don’t get the opportunity to do much in the way of inspections. But at $131,300 the risk is pretty low as an average little house in West Linn, even talking the cheapest part of the market, is probably worth at least $275,000. I think the odds are good that the buyer will make out just fine.
It was an interesting experience that I felt like sharing.
Don’t hesitate to call or comment if you have any questions.