Going Once, Going Twice, Sold!

Five bank owned properties were auctioned off yesterday afternoon in Hartford.

We learned about the auction a couple weeks ago thanks to a tip from a loyal reader about one specific home (thanks, Michael!). The property had been on the market with a realtor for a couple months, and we had even shown it a few times. We knew the bank was trying to get rid of it, but switching over to the auction format was a dramatic change from their previous strategy.

On our initial drive-by, the signage at the home pointed us to the auction company’s website and the listing for the home. The opening bid was set at $50,000 for the approximately 7,000 sqft property. It would be quite a deal if it actually sold at that price, even considering all the repairs the home needed. The auction company held open houses each of the past two weekends so that potential bidders could inspect the home, and also opened it up a couple hours before the auction.

We decided to swing by to check out the bidding action. About 50 people gathered to bid on the five properties. It was a diverse crowd with some attendees investors and others looking more like owner-occupants. There were not very many neighbors, and we were one of the few who did not register as a bidder.

The event was very well organized, with a team of auctioneers overseeing the process and adding a bit of humor here and there. A small sound system made it easy to hear everything as it happened. And they rigged up a cell phone to also broadcast the action live over the internet for bidders who could not be there in person.

The actual auction for each property took about 5 minutes. Furious initial action gradually transitioned to coaxing as the final two or three bidders thought long and hard about how much they wanted to win. Based on the descriptions of the properties, the auction seemed to get fair value for the sellers – there were multiple parties interested in each home. The one we were standing in front of, with the $50,000 opening bid, ended up selling for $360,000.

Auctions have not played a significant role in the local real estate markets so far. We’ve been fortunate to avoid the widespread foreclosure problems experienced by other areas of the country. Hopefully our relative stability will continue, and auctions will remain more of a curiosity than a primary way in which homes are sold.

6 thoughts on “Going Once, Going Twice, Sold!

  1. It is interesting that they would auction 5 properties in different locations in just the one location. Were the other 4 properties located in the Hartford region?

  2. Four of them were in Hartford and the last one was in Windsor Locks, I believe. We didn’t realize that they were going to be offering multiple properties either, that caught us by surprise. I guess it’s a way for the auction company to keep staff low and employee productivity useful. Less driving around, going through the same auction overview every time, etc.

  3. Wow. That is an amazing price for that house, whether it’s haunted or not! Do you know what the house on Collins street sold for?

  4. Amy, do you have a rough estimate on how much money you would have needed to invest in renovations immediately? I would think that should be counted towards valuing it’s “market” price.

  5. Sorry, Josh, I don’t recall what the Collins house sold for … neither of us wrote it down and I can’t find it on the website.

    The house needs significant work, Brooks, but everyone has different feelings about how much, and what it would cost. One investor-looking guy we spoke with felt it needed about a million, which is on the high side, obviously (and he wasn’t there to bid on this property).

    Amy and I felt that the work would come in at anywhere from $250k to $500k (or more) depending on what you consider “immediate,” how much space you want to live in, and the quality level of the work. The biggest projects (in my mind) are:
    1.) major system upgrades that are best done first, like structural repairs, electrical, plumbing, …
    2.) putting in a kitchen; there is the remnants of one, but it is very non-traditional, and there is a miniature one where the flower room used to be.
    3.) repairing the damage from years of neglect, like broken windows & doors, large holes in the plaster, …
    4.) cleaning up the primary rooms you want to live in.
    There is also a good amount of exterior work to be done, which someone may, or may not, consider an “immediate” need.

    The thing is, a grand home like this really deserves high quality materials and workmanship, which is more expensive. You could drop a $30k kitchen in there and it would work just fine, but I don’t think that’s the right thing for the house. I also think you actually could spend the million dollars that the other guy mentioned…

  6. So it sounds like $750,000 might be a reasonable estimate. It sounds like a big project, good luck to the new owners!

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