I briefly attended the REDC auction at the LA Convention Center this morning.  Apparently the turnout exceeded expectations, as they were forced by the fire marshall to halt the auction several times during the first hour to eject those of us who weren’t sitting in a seat, which I’d estimate to be about half of the people in attendance.
Anyhow, the following two Irvine properties sold before I got kicked out:
71 Avondale, 3 / 2.5, 1622 sqft., $560,000 (bidding started at $359,000)
62 Chula Vista, 2 / 2.5, 1350 sqft., $500,000 (bidding started at $309,000)
I’m not sure if those prices stuck because there were several cases during the short time I was there that, for one reason or another, certain properties were returned to the auction block for a second (or third) try.  Apparently the high bidder in those cases wasn’t able to actually pay the price he/she bid.
All and all it was a somewhat educational experience for me.  I suspect these auctions will continue to account for an increasing number of residential real estate transactions in the next few years.  Hopefully REDC will be a little better prepared the next time around.

Um ok. Well what happened?

Reid,

Couple of questions.  1.  Was there a fee to attend?  2.  Were there lots of bidders for the two properties you saw, or was it 2 to 3 people who were bidding against each other?

Thanks in advance.

Not impressive deals $345 & $370 psf.
You could do better with new construction.
I would love to know who the takers were.

Janet,
The info  will show up on-line in a week or so.  Unless someone check with the county recorder.

No fee to attend.  In order to participate in the bidding you had to show up with a $5000 cashiers check, made out to yourself.
Things moved quickly (about 3 minutes per property) and there were several thousand people in the room so it was difficult from my vantage point to see who exactly was bidding.  But it didn’t appear to be a showdown between 2-3 people.

Very interesting. I emailed Matt Padilla to see if the OCR covered the auction. I will be interested in what they say if they covered it.
The only thing that sucks is if those prices stick the 7 other properties in that area of 92602 that have received their NTS are in a heap of trouble. Especially for 53 Avondale who received a NTS of $628k. This pocket of 92602 is going to have the highest amount of foreclosures than any other area of Irvine unless 92603 steps up to the plate. 

I tend to think auctioning is a very wise way for these banks to offload their REO’s.

I know there’s a sensation when bidding on eBay that people get that it’s not about actually buying what you’re bidding on, but "winning" the bid.

Obviously a home purchase is far more major than something on eBay, but if they can leverage that feeling of competition and "winning" they might do a lot better than selling the traditional way.

hmm, I can’t find their disclosures anymore.  Does anybody have the list of disclosures that talks about the 5%, reserve price and use of shills?
The audience could have numerous people bidding and they all may be shills except one ‘buyer’.

Seeing as how Impac is the lender holding the bag on a majority of these properties and they are the REDC preferred lender. I don’t understand why you would ever think there could be shills there. I mean all their employees are busy hard at work and couldn’t possibly have the time or energy to do something like that.
{sarcasm off}

Here the problem with REDC, most of the properties are sold "subject to conformation". This means that there is a minimum reserve amount, and that the bank has to OK the high bid. In the case of the recent 4 day southern California auction, 99 bids were rejected by the banks, and now REDC is trying to sell them with above market reserve amounts. This is a joke, an aution should be just that, an auction. The properties should sell to the highest bidder, with no reserve amount.

Or at least with the reserve disclosed, or as the minimum (starting) bid.

Kelly, home many homes did they auction?  150?  Did they really reject 2/3rds of the high bids?
 
 

Interesting…I was offered a house same as a 71 Avondale in $475K in Oct ’ 03.
Didn’t buy it and for a while in June ‘06 I was kicking myself because I didn’t do it, comps were being offered around $735K-$750K.

How quickly things have changed it!!

If things keep moving in the same direction, and I don’t see anything in the horizon that can reverse the trend, probably next year the $475K Oct ‘03 price will be reached, amazing!

Out of the 4 day event, there were aprox 550-600 homes, of which 99 were rejected. Here is a link to their web site with the new  "auction liquidation price" minimum reserve. http://www.ushomeauction.com/postAuctionSales.php?auctionID=H-005

This guy has some interesting finds on the REDC auction.

Ugh.

That looks similar to an article I saw regarding LandAuction.com which is the same corporate headquarters address as REDC, as far as I can tell.
The BBB gives LandAuction.com a B rating.  With other DBAs listed: 
LANDAUCTION.COM//NRLL
landauction.com/nrll
National Recreational Properties, Inc.
NRLL
N R L L
 
national recreational properties, llc has the same address and a CCC rating.  With multiple DBAs:
Arizona City
California City
Holiday Island
Hot Springs Village
Pagosa Lakes
Tellico Village
Sun N’ Lake
Lake Shastina
Lehigh Acres
NRPI
Ocean Shores
Palm Coast
Shasta View
Sellyourlot.com
California Pines
REDC, doesn’t have an entry.

Yes they are the same company as landauction.com and some of their print ads have been side by side.

UPDATED: there is another redc auction on 2/2/2008, but after reading the post i would not buy a house from an auction. it sounds so risky for a first time home buyer. anyways…. check the net… someone actually paid 525k for a condo 9/20/2007…. and the tread started in august 26th. so i am assuming that someone got this from the auction. 21 day escrow…...  I could not believe it… is there something special about this condo?

62 Chula Vista, 2 / 2.5, 1350 sqft., $500,000 (bidding started at $309,000)

Another auction has been set-up for early next month:
http://www.ushomeauction.com/index.php
No homes in Irvine as yet…

I just attended the REDC auction at Sun City AZ and as an auctioneer myself I considered it shameful. Blasting music for no purpose but to disorient people. Bids went through the roof. One property after another was “re-sold”. One re-sold 3 times before I got disgusted and left. When a worthless ghetto property I had inspected “sold” for as much as desirable properties, it became obvious the “sales” were fake.

The game seems to be calling sham bids and sham sales until some sucker is seduced to make a REAL bid. If that REAL bid is over the secret reserve, that sucker is stuck with the deal. This so-called auction is loaded against the buyer.

Weeks after the AZ auction, REDC is trying on April 2 to “re-sell” 370+ properties that have “come back on the auction block”. Yeah right!

REDC runs a shameless scam. I don’t think their disclaimer that the auctioneer can bid for the seller relieves them from the fraudulent nature of these auctions. I would like to see some Attorneys General take an interest because these so_called auctions are misleading vulnerable people. Only vulnerable people will be taken in by this dog and pony show. An informed investor will not be fooled.

Stay away from REDC Auctions. Not only will you NOT find a good deal, you will be assaulted by deafening noise and have your time wasted.

Its interesting to see what both the buyer and seller premiums add up to on top of any commissions.
A true "auction" happens on the court house steps and you need an envelope full of cashier checks to play.
Regards