Real Estate Auction for Lender Foreclosed Homes - Modesto California REDC Auction

On April 29, 2008, I attended the REDC real estate auction of lender foreclosed homes in the Modesto California area. Prior to that, I called and received a catalog totaling 305 pages listing about 1500 homes that are to be auctioned in the Northern California area. There are nine auction days in the following cities: Sacramento (2 separate days), San Francisco, San Jose, Fresno, Modesto, Merced, Stockton, Oakland. There were four separate days where open houses were held for these foreclosed homes.

To buy at the auction, there are some steps to follow:

1. Register for the auction. This can be done online.
2. Pre-qualify for financing (unless it is a cash deal).
3. Visit and inspect the property / properties during the open house dates (all properties are sold "as-is").
4. Have a cashier check of $5000, made payable to yourself, and bring that to the auction. (A $10,000 cashier's check is needed to purchase each additional property.)
5. Bring a photo id to the auction.
   
6. Have a personal check to cover the balance of 5% earnest money deposit. So the $5000 cashier's check combined with the amount from the personal check have to equal the 5% of the Total Purchase Price.
   

There is a 5% "Buyer's Premium" added to the winning bid amounts for the Total Purchase Prices. All properties have clear title. There is no "Cooling-Off Period" or "Right to Rescind" once a bidder wins the bid. A real estate agent or broker representing the bidder are entitled to a 1% commission unless the Broker/Agent is also acting as a principal in the transaction. Some of the auction homes are "Cash Only", i.e. no financing is allowed. I believe in these cases the winning bidders have 30 days to pay the remaining balances. Some homes that have monthly HOA dues are listed as such in the catalog or in the "Auction Day Notes" flyer.

I stayed for about an hour at the Modesto real estate auction, and the auctioneer auctioned off about 26 properties. The auction was fast faced. No photography or video taping is allowed inside the auction area. There was a note outside the auction area saying that auction prices are not disclosed and people can check the properties' sale prices after close of escrow.

For the auction homes in Modesto and the surrounding areas (Ceres, Keyes, Patterson, Ripon, Riverbank, Salida), the starting bids ranges from $1,000 to around 200K. The homes "Previously Valued" (as listed in the auction catalog) from 130K to 600K. For the 26 properties that were auctioned off during my attendance, the final bidding prices ranges from 30% to almost 70% of the "Previously Valued" prices.

More information can be obtained from the Real Estate Disposition Corporation wesite.

Disclaimer: All information is verified but not guaranteed. Please check with the appropriate sources if there is any discrepancy. This is not to be used as investment advice. This detailed an auction event attended by a Modesto real estate agent Irene Chan, MS, REALTOR ® in Modesto California on 4/29/2008.