Trevor is my brother-in-law. I’ve been helping him and his wife to find their first home over the last couple of months. We made an offer on a bank-owned home in Edmonds that was accepted, but in a long and twisted tale of banking regulation gone wrong, they had to give up that home and start their search over again. They also had to move – they had given notice at their apartment complex and their unit had already been rented out. So that’s how I gained two roommates 🙂
Trevor and Liz were originally hesitant to consider properties sold at trustee’s sale, but being forced to live with me encouraged them to look at all options. After watching a few properties that would normally be outside of their price range sell well within their range, Trevor and Liz threw themselves into the process. They were pre-approved to borrow funds at auction, received a username and password to search our trustee sale database, and started driving properties that they were interested in.
Trevor bid on a home at auction every week for three weeks prior to Thanksgiving, barely losing out on all three. He was being conservative at my insistance – I wanted to make sure that they not only got a good value – but a good home as well.
On Thanksgiving morning we drove two properties in Lynnwood, including the one you see pictured above. We couldn’t get inside, but it was obvious that the home was vacant. We used recent MLS photos to determine the layout and condition of the interior. I called the previous listing agent to get her assessment of the home, and we pulled title to see what liens would survive the foreclosure.
Trustee’s sales usually happen on Friday mornings, but because of Thanksgiving, the sale was postponed until the following Monday. Perhaps because of this, and perhaps because people might have been gone for the holiday, there was a thinner crowd than usual at the auction. The property above was called, and Trevor qualified for bidding, as did three other people. The opening bid for the property was $170,695. I had the current market value at $255,000 – $260,000, and Trevor ended up with the winning bid at $195,500.
Keep in mind that Trevor still hadn’t been inside the home. I met Trevor at his new house and we drilled out the lock on the front door. I gave him a little pep talk ahead of time, saying that it would be ok, and that if need be, they got the property at large enough of a value that it could be rented or sold on the market.
Trevor and Liz moved into their new home this weekend. Trevor and I had walked in to find that not only was the home in good condition, but that the previous homeowner had left all the appliances, including the fridge, washer and dryer. Trevor is over the moon, and not just because the home is in good condition. We’ve already started their refinance, and before Christmas they will be able to cash out the 10% that they put down. They will have paid about $12,000 in commissions and lending fees, will have a 30-year loan at 4.75%, and their mortgage payment will be lower than what they would have paid in rent for the same home.
That’s how I lost my roommates. There is another auction this Friday, and the Friday after that, etc. We have an introduction to auction class every Thursday at 6pm, and we go over the hot properties immediately after that at 7pm. Whether it’s for your primary residence or for your investment portfolio, the best buying opportunities in real estate are at Pickett Street!