I was recently on your website and think you do a nice job with it. I noticed you pay quite a bit of attention to the auction market. I have been hearing stories of folks picking up fairly nice homes with $10,000- $30,000 cash, and find that almost unrealistic. How common is something like this? I’m beginning to look for opportunities like this and the amount of information on the internet regarding auctions can be overwhelming. If all auctions are publicly posted I don’t understand how deals like these can be found. Any insight?
ArizonaHomeTalk.com reader and potential home-buyer
Dear ArizonaHomeTalk.com reader,
There are 329 properties for sale in the Phoenix area under $30,000 - that includes condos/townhomes and single family homes.
All of these require full payment in cash - you can’t finance a home for that little amount of money.
Many of the STARTING bids at auctions may be advertised at 10k or 30k - but they get bid up quickly usually to fair market value. You could “win” a home at auction for $30,000 - but if that doesn’t meet the seller’s reserve price and is too low (under fair market appraisal) then the auction house will notify you after the auction that they won’t be going forward with your “winning” bid. I’ve seen that happen a couple times and it really upsets buyers since they spent an entire day sitting at the convention center bidding (sometimes from 8am-4pm) and all the upfront research/inspections.
I’ve written posts about what really goes on auctions where you can see where they start the bidding - and what the winning bid turns out to be. You’ll see they don’t sell anywhere close to what the starting bid is. Don’t get me wrong - they are usually still GREAT deals - but most of the auctions I’ve taken buyers to - they end up
getting an nice house for about $70-$140,000.
Read this post and the other posts I link to within this one - and you’ll see the prices that happen at auctions.
One thing to remember is most of these homes are available NOW on the MLS database and I have access to all of them. You could make an offer on these deals without even attending an auction. The auctions are really a big marketing promotion for properties that you can access to right now.
Let me know if I can be helpful to you.
Becky (at) BeckyWyattOnline (dot) com
Properties for sale under $50,000 RIGHT NOW -