Though Loudoun foreclosure/bank-owned properties are selling like hot cakes on the open market, foreclosure auctions are like ghost-towns. Few attend foreclosure auctions and the ones that do attend rarely make a bid.
Why? For the same reason regular properties that are up for sale just sit on the market…they're overpriced. And even if the price seems right, people are skeptical about bidding because they can't always inspect the property in person prior to bidding.
There's a great article in the Washington Business Journal that helps explain the situation in more detail. Here's an excerpt:
Many investors, who make up the bulk of active bidders at auctions, say the banks are asking too much for the homes. So far this year, 748,381 homes—or 46% of the foreclosures—have gone into the possession of the banks as real-estate owned, or REOs, because no bidders were interested in them at auction.
Individual buyers looking for deals at auctions will likely not find one, says Foreclosures.com President Alexis McGee. Making it harder for individuals: it is generally not possible to examine the properties in person before buying them and buyers must have money with them to make a down payment on the home.
Back in April, ABC7 News (WJLA) interviewed me for a story on this very subject. Funny thing is, the same is true now as it was then.
The only good thing is that banks are starting to "get it" when it comes to how they price their bank-owned properties on the open market, which is evident by the increasingly high number of bank-owned property sales in Loudoun County and the DC metro area in general.
There is a huge foreclosure auction by Real Estate Disposition Corporation (REDC) and USHomeAuctions.com going on in DC and VA on June 7, 8 and 9. The auction will have hundreds of foreclosure properties located in the DC, MD and VA, including Loudoun County.
The auction on June 7 and 8 is being held in DC at the Washington Convention Center. The event on June 8 is being held in Richmond at the Greater Richmond Convention Center. You’re able to preview and inspect the properties today (June 1).
If you’re interested in going to the event and having professional guidance as to the fair market value and pricing strategy of any property up for auction, I am available to consult on an hourly basis. Contact me for more details.