Foreclosed home auction held this weekend

July 10, 2009 1:15:55 PM PDT
Hundreds of foreclosed properties will be auctioned off this weekend at the Santa Clara Convention Center. Most of them will go for a fraction of their once-high market value.

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A home on South 33rd Street in Richmond and one on East Hills Drive in San Jose are among 300 foreclosed properties in Northern California that will be auctioned off to the highest bidder.

First-time home buyer Linda Paine will be in the audience with her bidding card ready.

"I love my mobile home, but we want to own a home. So that's my dream," says Paine.

The starting bids sound like a dream, too, with $500 for many of the Richmond listings and $89,000 for one 12th Street address in San Jose. In reality the auction selling prices climb quickly, but can be about 50 to 60 percent off the high-market value.

Auction.com is conducting two auctions in Northern California this weekend, one in Sacramento on Saturday and one at the Santa Clara Convention Center on Sunday.

REDC or Auction.com has sold 18,000 foreclosed homes for various banks this year. Those properties have brought in $1.3 billion. Hundreds of people show up for the auctions, but even the company in charge says bidders need to do their research and know their budget.

"If you can only afford a $200,000 house, the payments on that, then that's all you should go for. You should not get caught up in the frenzy of the bidding and go $225,000 or $250,000," says Rich Weinberg, an REDC spokesman.

Now that the federal foreclosure moratorium is over, Auction.com expects to be even busier, but many in the real estate industry hope banks have finally figured out that loan modifications are more profitable than foreclosures.

"The potential if the banks are willing to work with the potential borrowers, then foreclosures could actually go down," says Michael Sibilia, a Keller Williams broker.

For now, foreclosures and their bargain prices still offer people like Linda Paine the opportunity of a lifetime.

Link: California home auctions

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