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Auctions Signal New Opportunities in Foreclosure Sales

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An article in today’s Wall Street Journal*, “Mortgage Woes Force Banks to Take Hits to Sell Homes,” alerts me to a trend you need to know about: a significant change in the way banks are disposing of foreclosed properties.

The article, by James R. Hagerty, reports that on Saturday, The Real Estate Disposition Corporation of Irvine, California, organized a property auction in San Diego where nearly 100 foreclosed homes were offered for sale at one time. More foreclosure auctions are planned for May 19th in Los Angeles and for May 20th in Riverside. Click here to visit The Real Estate Disposition Corporation’s Website to learn about more upcoming auction sales.oration

 To quote from the article:

"An auction of nearly 100 foreclosed homes here Saturday showed that mortgage lenders are having to accept huge discounts in some cases to unload such properties . . . A surge of foreclosures over the past year or so has left lenders struggling to sell a growing backlog of homes. Rather than relying on real-estate agents, the usual practice, some are turning to large-scale auctions to speed up the sale process.”

We are not talking about the come-on fantasy prices that you hear on those radio and late-night TV ads for foreclosed properties. These are realistic bargains. At Saturday’s sale, for example, a four-bedroom house in Oceanside, CA sold for $495,000. A nice price tag, but still about 30% below the property’s appraised value. And a condo in San Diego went for $120,000, less than half its appraised value.

By the way, there is a wealth of information on The Real Estate Disposition Corporation’s Website about how to buy properties at auction. Make sure you apply every resource so you have the skills to profit from foreclosure properties when good opportunities come along.

The Journal story also points up how dangerous it can be to believe the property values that you hear from appraisers. You apply for a mortgage, let’s say, and the bank sends out an appraiser who states that your property is worth $500,000. If you start believing that figure without benchmarking against current comparable sales in your area, you could pay too much, fall victim to the kind of “pie in the sky” thinking that leads you to over-improve the properties you buy - or worse. We all have to be sure to keep our heads on straight in this turbulent marketplace.

For still more coverage and perspective on auction activity in foreclosures, I'd urge you to visit Alexis McGhee's blog on Foreclosures.com.

Thank you for stopping by The Trump Blog this morning. Check in here often for updates on the housing market.

* If you are not an online subscriber to the Wall Street Journal, you may be asked to pay a fee before downloading this article.    

Michael Sexton is President of Trump University.

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7 Comments

[-] Posted by Daniela -Madrid on 05/14/2007 4:09 PM
Mr. Sexton,

with your permission, like this REDC site working with foreclosures
since 1990, hmm, please how is possible? to change that state of facts, when globally spoken people are enough on the planet, working, making wars for resources sure! but the values are not more values and this continue instability repeat as a vicious circle from century*s, and what we say about a periode that was glorious is hard payed with blood and look, with an outside eye, we soften a bit the effects by inventory*s and other wars, treats and lies generally spoken in history
but the roots as disobey, who have create the planets the whole system we use and abuse is a perfect creation IF we listen at the Word of whatever is that Giant Inteligent Creator! as much we try from century*s to do it otherwise the circle came on thissame point which each time we solve with some temporary war peace alliances but the foundation is wrong! are so simple rules which ensure that even the climat change we live now may be solved with the grace of creator! the class is Jerusalem and his Sant Mount on which even animals are not allowed,
about animals, I*ve seen horses make the cross sign before a huge wind and rain, rabbits before sacrificed make the forelegs in cross too,
I just read that if we respect his rules and that Bible has everysingle answer no matter what aspect of the life, sins, illumination, peace or work, taxes everything!!! with pre word in the Scriptures and it happend!!
from using our inteligency without his sustainment to the payement of the workes, everything aspecty humans may live is wrotten as class to learn, and that is the Temple will be rebuild, He said: DO IT AND TRY ME
to make your Earth flourish again, bread on the table! about work, about wrotten words importancy, everysingle aspect we need to know, even governours are protected by him, He said that we must obey becouse this people respond in front of hiom too, and they*re job is to protect our wealth too by rules, but again, which rules we respect, which alliances we do if not just one time before the worst in hystory may happend, LISTEN that is not too late and that with a Summit decision we can start repecting the wish of the Lord, the Father the God, the ONE, is simply soo, he said like...when the dirty will be on his emple it will start and that the ...canaas? must run in the mountains? I will search to be sure that I did*t spoke other words than his, but cleaning and rebuild the Temple as He asked for, let*s do it as a entrepreneurship and fight for and thee the results, anyway, the results until now, generally spoken, US Europe Asia Africa, it start from the subtle interconectedness between Land People Science but make peace with God respecting his will.
That is, and is not the Jerusalem Syndrom, is just top see the roots and make the difference by speak it up as it is ,
Bless to all of us, and hopefully making the right peace investing in the people and to serve them properly, just this.
Daniela
[-] Posted by member1372968 on 05/15/2007 6:24 PM
The Story of Dignity by Design Enterprise – clothing for the physically challenged and disabled. [www.dignitybydesign.com] What it means the American Public, returning soldiers and how it relates to foreclosure in this country - and the many non-responses by Mr. Trump directly. Does he owe me? I don't think so, but I thought he was a smart business man and opportunist.

First let me preface this with the fact that I am currently using every contact within my network to bring action against Bank ing practices and the SBA. Single handedly these two entities brought this fine company to a demise, and as a final blow, are taking my home by June 14th. This wonderful business survived for 6 years, we paid takes, hired many employees and consultants, used inheritance funding and received a small, low doc, $150,000.00 SBA Loan – which $50,000.00 was paid back in 3 years. I was verbally promised by my lender that I would be able to come forward again when in need of manufacturing funding and that the Low Doc $150,000.00 loan would be rolled into a 7A (up to $750,000.00) – however, the bank denied the company funding over and over again. Their reason was sales. However, I could not sell without manufacturing, and I could not promise on contracts without having the goods on their way. In late 2005, I closed doors. The Bank/SBA refused to lower the loan, forgive the loan, make arrangements for lower payments, took $20,000.00 in inventory, and foreclosed on my home. They have sold my home – valued at $259,000.00 for $124,000.00 – more than what was owed with no credit for the inventory – AND they are in second place on the mortgage holdings. BUT they want to stomp this company to the ground and take my home with it. The intellectual rights and value of this company still exceed $1M, put into the correct partner or manufacturing hands. With the returning veterans – when will there be better timing?

It is far from understood in this country the value of clothing that is dignified and elegant and affordable for all physical abilities or disabilities. There is nothing more inhumane than the struggle to meet daily needs without effect or the need to feel whole as an individual, not a disability. For years I struggled to find investors with vision, that saw the need and would be willing to stand up for it with capital – but for those same years it always came down to the "glossier" investments – high tech. There was little room for understanding or recognizing the disabled community or the elderly.

The statement to small business is bleak: Don’t start a small business in MN (anywhere?) And, prepare to perish if under funded by the SBA – as they will attach your home and every asset, and come after you with a vengeance. However, if prepared to lose everything that you have worked for for 50 years, then live your dream.

The other statement made is is that the disabled and elderly in this country mean as little or less to America than a stray animal.

I want two things – I want to keep my home and I want to bring my company to the public and give it and it’s clientele the Dignity that they deserve… and frankly – I want the company to flourish more than the former – because it means so much to so very many – 1 in 6 Americans. It’s a no-brainer. But do I want to be part of this mass-foreclosure hysteria. God no. Maybe someone will listen, maybe Mr. Trump,

Donna Freeberg, Dignity by Design, President
[-] Posted by member1289632 on 05/15/2007 11:29 PM
Thanks for the kudos Michael. My suspicion on the "deals" you speak of in that San Diego auction, how did they determine the "value" and "discount". I had foreclosures.com clients attend that auction, and the only "deals" that happened were houses that needed alot of work, in rough areas, and when you account for the repairs and discounts needed to resell, your profit margins were no more than a standard 6% commission. Why bother?

The best deals are from one-on-one negotiations with a motivated seller, like a pre-foreclosure deal with equity to salvage. There are tons of them, and growing daily. Our #s are up over 100% statewide and in SoCal more like 200% from same time last year.

Stay out of the hotel room buying events, and start making calls and door knocking folks in trouble who need you. That is where you'll find deals that net you at 2-3 times what a Realtor makes, to pay for the risks that you take!

Thanks again for the mention. Enjoy my blog at Foreclosures.com! :) Alexis (The Maven)
[-] Posted by member1500169 on 05/16/2007 3:16 AM
Hi Michael
We are a South African auction company and what is very interesting is that "properties in possesion" what we call properties that the bank has foreclosed on have been auctioned off for years in South Africa, so much so that in an attempt to instill an Australian property system into our market which is to auction all properties as oppossed to selling them through a realtor is meeting with resistance because the property owner who os not in trouble is reluctant to be put into the same category as a property owner who has been foreclosed on. We believe in auctions as a method of disposing of your property, its quick, its transparent and the prices reflect the market sentiment, that aside of foreclosures. The manner in which foreclosed properties are auctioned off by the banks remains cruel, we are appealing to property owners in trouble to get us in to auction off there homes before the banks foreclose on them, this way they get something back and keep there credit record and dignity in tact.
[-] Posted by member1554929 on 05/16/2007 1:11 PM
Let me put this as politely as a person may sitting in a public setting, wearing fringed cut-offs, and homeade sleeveless Tee shirt.

"Who's gonna buy all this property for sale no matter how cheap it is?"

If the bad people are ALL housed in jails or prisons, and the Good People have all over-extended themselves; and with the majority of the electorate, (President George W. Bush being one exception,) choosing PARANOIA as their outline for an Immigration Policy, I ask again, "Who's Buying???! ! ! ! .. thes bargain basement properties.}

Your Friend, Glen in Florida
[-] Posted by u102584 on 05/21/2007 4:01 PM
How much impact are the lending rates fluctuation affecting a way of saving on a foreclosure? I'm thinking about the president making capital gains taxes lower, then allowing them to deal with fixed rates before amortizing their loans. But then it would be dependent on the demand for new homes. Many of the people in my area are simply doing reconstruction. Michele Williamson
[-] Posted by member1185329 on 05/22/2007 6:30 PM
To all of you interested foreclosures please remember people are on a time table and if you do not know what a decent profit margin is, can't read CMA's and DOM studies, don't know how to place offer, work a short sale, get the correct financing(or I'll be coming for your house too), have attorneys that know how to order a payoff, don't know the timeline for acceptance by third party approval for the particuliar bank and so on on on. Leave people who are distressed alone!!!
Greatly Appreciate it
Loss Mitigation Field Rep
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