On August 9th I attended the trustee sale that takes place at the El Cajon Courthouse. In San Diego there are three different locations where trustee sales take place. The first location is in downtown San Diego. The second location is in El Cajon. The third location is in Oceanside. All auctions take place outside ‘on the courthouse steps.’
The first thing that hits you when you go to watch the auction is the casual nature. You would expect to find shelters, signs and people dressed up with ties and suit coats. That is not what you find when you get there. The bidders are wearing shorts and T-shirts. The auctioneer is sitting very casually at a picnic table with her laptop open and ready to receive bids. The auction takes place just outside the cafeteria. The auctioneers sat on the picnic tables and those that wanted to bid casually stood nearby. (See picture.) One of the many interesting things was that 2 auctions were going on at the same time.
The process of bidding on one of the houses is straight forward and complex at the same time. The auctioneer states all kinds of information on the house beyond the address and opening bid price. Many of the numbers flying off her lips are difficult to understand. This process is an all cash process. Do not bring your checkbook. You need to have cashier checks in varying denominations in order to bid. If your cashier check is larger then your winning bid hey take the check and will mail you the difference.
On today’s docket there were 15 homes listed to be auctioned in El Cajon. There seems to be no rhyme or reason on how houses were chosen for the El Cajon Courthouse. As I look at the list I noticed that we have houses that are in Oceanside and downtown San Diego. You would think that those houses would be at the other, closer courts. I spoke with one of my Title reps and they believe the Trustee is allowed to choose where they want the auction to take place.
The auctions begin at 10 AM. The first house for auction had an opening bid of $203,004.36. It’s interesting that they have an opening bid broken down to something as minute as $.36. After the auctioneer stated the price she looked around waiting for somebody to bid on the property and nobody placed a bid. After some time she closed the auction and the property reverted back to the bank for ownership. The second house was similar to the first; the opening bid was $446,000. Nobody placed a bid on the house and it ended up going back to the bank. The third house was a very interesting process to watch.
This houses opening bid was set at $301,750. The first bid is for one penny over the opening price. Soon there were four different people bidding on this property. The auction amounts started small going up by $20 and $50 but eventually picked up to amounts of $100 and $500. When the bids hit $306,000 everything stopped. I watch two of the men who were bidding wave off saying that they’re not looking to bid any further as the third person walked away and after the 3rd call for bids the auction was closed and the property sold for the $306,000 price.
I spoke with one of the vendors after the auction. I asked how do you prepare for an auction? His response to me was “whatever it takes to get information”. He said that they will inspect the property visually by driving by, walking around the property, and looking at the roof. If they can get inside the house they would checked the condition of the interior and check to see if the slab is cracked. They would check the title to make sure that there were no clouds in the title and that they can own the property free and clear. They will also check to see if there are any other liens or taxes against the property. After all of this research they knew exactly what they would bid as a maximum on any of the properties they want to own. He told me that they have a team of researchers that check out every detail that they can find about a house. During the auction the bidders were on their phones back to their offices and speaking with their investor making sure that everything is good as they move forward.
The last house I watched did not go to auction and was postponed for 2 weeks. It’s a very interesting process to watch the trustee sale in action. If you have the opportunity I would highly recommend that you go and visit an auction and watch this process as it takes place. It really puts a face to the ongoing crisis that we have in the foreclosure market here in California.
*Disclaimer – David Cairns is a real estate professional serving San Diego, California and is licensed by the State of California only under CA DRE lic #01890743. All information on davidcares.com is for informational purposes. Information regarding short sales, foreclosures, buying homes, selling homes or any other information is general in nature and is not intended or should be construed as legal, tax, or other advice. Every person has a unique situation; I would be happy to talk to you regarding real estate matters. You must consult a legally qualified person for advice in all other areas before taking any action. I can be contacted at firstname.lastname@example.org