Ladera Ranch Auction: foreclosure bidding war with a twist

Orange County Foreclosure & Real Estate News

Article Abstract: While bids at the Ladera Ranch foreclosure auction were starting off as low as can be, the highest bid was set at 705,000 almost a $500,000 discount. What many foreclosure seekers don't know is the bid still has to be accepted by the lender. Many times the bank or lender will accept low offers depending on how long the house has been foreclosed or due to other real estate market factors. However, there are instances where the lender will reject a bid if they think the house has a greater value, even due to the nature of the foreclosure market. Read more below.

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What really happens at foreclosure auctions? I've posted an latimes.com video and a photo gallery that take you inside the foreclosure auction staged last week by DoveBid and Catalist Homes at the Fairplex in Pomona.

We focused on the bidding for the Orange County house at left: 3 Magnolia Drive in Ladera Ranch, probably the nicest house of the 75 homes that went up for auction. Four bedrooms, 3 bathrooms, it sold for $1.2 million in 2005, but in this market was put up for auction with a scheduled opening bid of just $429,000. Because the opening bid was so low, there was a spirited bidding war for the home.

I'd like to think the video is worth watching for the surprise ending -- which itself is an education in how foreclosure auctions work. Those of you who can't wait can click on the link below and I'll explain what happened.

Here's what happened: The winning bid for this home came in at $705,000. Remember, the bidder agrees to pay an additional 5% premium to the auction companies. So the total bid was $740,000 -- a 38% discount from the peak sales price of $1.2 million. However, the bank or lender that owns the home reserves the right to reject the high bid as too low, and that is what happened here.

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More about foreclosure auctions. If you are new to the foreclosure investing industry and want to learn more about the California foreclosure auction processs- visit the Foreclosure Learning Center. This page will give you foreclosure buying tips from scouting out the right foreclosure to properly bidding on a foreclosure at auction. The Learning Center also provides information for those facing foreclosure. If you are facing foreclosure, get familiarized with the California foreclosure laws.

 

 

 

Article Source http://latimesblogs.latimes.com/laland/2008/03/auction-for-lad.html