Category: General

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.
Dianne

The Internet is the single biggest change that I have seen happen to real estate in my 30 year career. I go back to the days of the massive catalogs that were published every two weeks and distributed to Realtors. Just think if it, every two weeks. By the time I received it, they were already outdated by today’s standards. I then experienced the data base being available in html. No photos, very cryptic, but at least it was current. Then our local multiple listing service made the big jump to a full fledged website, with photos! The RMLS in Oregon was the first full-scale Internet MLS in the country, or at least that is what I recall hearing.

Today we take all of that for granted. If you are looking to buy a house, that is what you do with your free time at work, at home, waiting on an appointment. We do it in the palm of our hand. It truly is remarkable.

It has completely changed the way that I show houses. Now my clients tell me what they want to see. I do still do property searches, daily, for my clients, but I then send them a link so that they can approve or disapprove of what I find. They also send me what they are finding and I put that onto our agenda. I no longer waste their time by trying to figure out what on the market will suit their needs. It did work the old way, but the new way is so much better!

That leads me to today’s topic, on-line websites where we all peruse the inventory.

I don’t have a favorite, but I do compare them. They can have wildly divergent opinions of value. I like to compare zillow, trulia, realtor.com, and redfin. I do this when I am doing a property analysis mostly because I know that the public is doing it and I need to see what they are seeing. I honestly don’t find one sight any better than the other. I do, however, have an opinion about their accuracy.

All of these websites base their valuations on statistical analysis based upon the public record. It is public record what other houses have sold for in the area with information on the year built, the size of the home, the type of roof, etc. However, the public record is often wrong. How this happens is a bit of a mystery. Sometimes it likely goes back to the difference between approval of building permits and changes made during construction. If the data isn’t updated in the tax assessors office, it stays out of the readily available public record. An easy example would be a 1920’s bungalow with 2 bedrooms and 1 bath that then had a second story attic turned into 2 more bedrooms. This is now a 4 bedroom house, but the tax record may still say it is 2 bedrooms. The bottom line is that the public record is not always accurate.

Additionally, the public record has no knowledge of condition of the property. Making it easy, let’s say there is a subdivision of 100 nearly identical houses that were built in 1998. Most are likely in average condition having been maintained with new carpet every 10 years and perhaps some new counter tops. Public record won’t know that a cat lady lived in the house and neglected to vacuum for the last 20 years. It also won’t know that one lucky couple won the lottery and put is subzero refrigerator, custom in-lay wood floors, and hand crafted plaster walls. The tax record does not know one is the epitome of luxury and one is one match away from an insurance claim.

The bottom line is that the tools on-line are remarkable, but you should take the values that are posted on line with a grain of salt. Ultimately you still need to get inside to see the house and the house still needs to be properly priced when listed for sale.

I hope you find this helpful,
Dianne