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Buying a house at an auction

17 Jan 2021 5:45 PM | Anonymous

by Pravin Trivedi

Ten years after we bought our first home, we decided we wanted a bigger, better and more comfortable home in an area better than a HUD housing development. We spent six months looking without finding any that we liked. During this search, one of the first houses we looked at was one partially constructed where the builder had died. The foyer needed tiles; the heating and HVAC ductwork still hadn’t been connected to the furnace and so on. It looked like it needed about another $30,000 or so of work to complete. The house had a brook running behind it. I loved it but looked like too much work. So, we continued the search for a house we could move into right away.

A few months later, a house on the same road a few lots uphill from the one we saw and by the same builder had a “For Sale” sign on it. I noticed that a bank was the seller. I decided to do a little research. I found out that since the builder was not paying the bank, the bank had repossessed some of the homes. My bank owned that house and when I visited them, they told me that they were going to auction it in two weeks.

Well, a house auction is not something one does every day! I asked the manager what was involved. He said that you had to put up a banker’s check for $1,000 and then could join the bidding with other bidders. We thought it was crazy, but the starting bid was $100,000. With our estimate of the work involved, if we got it at that price it would be a $130,000 home. Just a few months ago the asking price was $149,000 until the builder’s wife took it off the market.

Finally, on the day of the auction, armed with a check, we went up to the house on the hill. The bidding was going to be in the living room, and already there were thirty or so people crowded in. We were disheartened, and would have left if it were not for the fact that the bank already had our check. Others might have also been wondering like us as well.

One of the folks came over to talk to me. He said, “Are you bidding on the lots or the house?”

“I don't know what lots you are talking about. We are here for this house,” I replied.

“Good,'' he said, “don't worry. We are here for the lots that are not yet built. Just bid a dollar above the bank’s asking price and you’ll get yourself a lovely home.”

The bidding started and just to be sure, I bid a hundred dollars more than the bank opening bid. After a few calls, nobody outbid me and we got the house at that price!

Next few days were terribly busy. We had to find out what loans were on the house and pay them off. Check with the town for back taxes, unpaid electricity and utility bills. Then we had to find vendors to do the remaining sheetrock, heating, and air-conditioning work. We decided to do the tiles in the foyer ourselves, and to complete the yard work and plant shrubs. We managed to get all the work completed and paid off within thirty days of our successful bid. We got an occupancy certificate and decided to move in with the help of our extended family.

Thank god for extended family. Three brothers in law, their families and a rented U-Haul truck going back and forth between the two houses from early morning till late in the evening, and countless round trips later we finally transferred all our belongings into the new home. The next day we cleaned out the old place thoroughly and repainted it. We decided to rent it out.

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