Yun and I have been looking for another house to buy for a while now as an investment property to help secure our future plans in Mexico. We left for Phoenix early on Saturday to attend a foreclosure auction. This was our first experience with a live auction and despite attending the ‘training’ session for first-timers, it was still rather intimidating. This is mostly in part due to the auctioneer speaking at a rate that renders most of what he says unintelligible. This made the bidding process a bit stressful because the bid increments were generally $5,000 and it was hard to follow what the current high bid was.
We have looked at a number of homes here in Tucson over the past few months. There was one in particular we were interested in which by the time we were willing to put an offer, the bank sent the home to auction. This is what prompted us to attend the auction. There were over a 100 homes to bid on, but we were only interested in the one. Each home takes about 2mins to complete and the one we were interested in was near the end of the list. As such, we had to wait nearly 3 hours before we had the chance to bid.
To add to the experience, the convention center had the temperature set at 69 degrees which made it horribly cold! It wasn’t bad for the first 15 minutes, but after 3 hours, we were mostly miserable. The house we were bidding on started at $500 which I opened up the bidding with. There were two other people who were interested in the property and quickly increased the price (each bid raised $5k). Having never done this before, I was not sure as to the strategy to adopt. I could either respond quickly with a counter bid or wait for the auctioneer to do the ‘going once, going twice’ thing. In the three hours we spent there, we saw people doing both. I decided to yell out my counter bids with no hesitation, mostly because I was freezing and obviously over-excited.
Amazingly, we got eventually got to our top number without any intention to go further. At this point it was pretty confusing to determine who had the high bid because the auctioneer, as I stated earlier, is mostly unintelligible. However, the attention was on one of the other bidders who apparently was contemplating if they should continue bidding. The next thing I recall was the rapid fire “going once, going twice, and sold” to us!
We had contemplated our odds before bidding on Saturday and we thought they were pretty good given it was a cash-only sale which would reduce the pool of bidders. It was frustrating that there were others bidding so aggressively on the same house.
We’re pretty excited about winning and owning a house without a mortgage (as opposed to the home we live in!). It isn’t fancy and will require plenty of work. It is structurally sound and the area isn’t too bad. We also like it a lot because it has a guest house on the property which has its own living room, kitchen, bedroom, and bathroom. Once restored, we are hopeful that we’ll be able to rent it out for around $1k a month.