Monday, December 17, 2007

Today's Oregonian.

"141 homes sell for a total of $65 million at real estate auction
Housing - With 96 percent of the houses going for below the reserve price, "we lost money," says the builder"

Buena Vista.

O.K. I guess I don't understand the term 'reserve price.' Did they sell, or didn't they? Did only 4% sell in reality, or 2.35% of the homes available?

Is this a bait and switch? How about: "Hi, thanks for bidding on our homes. Unfortunately, you did not meet the reserve price. However, you are only 10,000.00 from meeting the reserve price, and with our easy payment plans you could have this home easily!"

The kicker: "None of the 29 Bend homes sold..."

Even at a loss?

Does that mean no bids at all?


Anonymous said...

I guess I don't understand the term 'reserve price.' Did they sell, or didn't they?


It's tricky. Like recently when Tetherow announced that 19 property's had closed. Note, that 'recorded' is what matters. I think today 'closed' means a handshake took place.

'Reserve Price' typically means that the auction didn't make the reserve, which means the seller has the right to decline the offer. However the contract says that the seller has the right to cancel the deal for up to 15 days after the auction at any price.

What's happening here is that over 90% of the 'deals' are NOT being 'recorded' ( when buyer gets the deed ).

"Sell" doesn't mean anything, and neither does "Close". Contracts don't mean anything either.

Really what the deal here is that a buyer "winner", has to pay 5% buyers fee as a cashier check, and its not refundable. Most deals are not closing. If the SELLER really wants the deal, then they can pick and choose the deals. Either way the 'house' ( auctioneer ) makes a cool 5%, and doesn't give a fuck what the end result is-is. The auctioneer gets the 5% cashiers-check and is DONE!

The SELLER has 15 days to nix the deal. If the BUYER doesn't close in 21 days the BUYER forfeits all rights, like they ever had any.

There is a classical saying that the more the lawyers and law, the more corrupt the nation. Look at the "les schwab sales agreement' the city was fucked the second they signed it.

These buyers at these auctions are fucked the second they hand over their 5% cashiers-check, which if you didn't have you couldn't get in the door.

The good news is that at the end of the day, the MTG industry has some idea of how to price their MTG-CDO's based on the outcome of these auctions, even if 'recordings' never take place.

When the media reports that a 'sale' took place at one of these auctions, what it means is that the 'house' ( auctioneer) nabbed 5% cashiers-check. Let's play the numbers, $15k times 199 = A cool $3M dollar cash haul. For $100k of PR & Marketing.

Again, over 90% of the public is not seeing a 'recording' and NOT getting their 5% back.

Real media/press as a service at least might have told the public about what trails of misery these guys left in prior towns, but HELL NO, everyone wanted a piece of the $100k PR budget, e.g. advertising revenue.

Anonymous said...

The way they're keeping the 5% ignoring the phone and mail for 21 days, and then about a month after the auction sending pre-dated letter telling the person that their 21 days are up for not having 'closed' the deal.

The terms of the contract says it doesn't matter whose fault it is, 21 days you lose the money, and thus the 'house' ( auctioneer ) can legally do nothing, so that 21 days elapses, and they keep the 5%.

It doesn't appear that these auctions are about trading hands, it appears that they're more about collecting deposits.

Yes, it would be interesting to see how many of the 199 property's of Buena-Vista actually get 'transferred' to a new owner. We'll never know, unless a month from now, someone does a search through county-recordings for every home sold, to see if they actually 'sold'.

At the end of the day great scam, national sleaze-bags carpet-bag towns all over America, and firms like Brooks get National media attention and free marketing of their property, you also know now how they'll take, so this is a move for buyers to step in directly to Brooks or Buena-Vista and make realistic offers, so these 'auctions' also can stimulate the market.

The only one that gets fucked are those that 'win' the auction.