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The Results of Today’s Auction

September 19, 2007 by Lucas Lechuga

Six properties were auctioned this afternoon. Five of them were condos and one was a single family home. A couple of weeks ago I wrote about four of the condos.

The auction was held in the back yard of the single family home that was being auctioned, located at 5900 NW 13 Avenue. The single family home was the first property to be auctioned and sold for $53,500. It was a 2 bedroom/1 bath with 622 square feet of interior space. The house was in pretty bad shape but it resides on a large corner lot with .149 acres.

The auctioneers decided that since the remaining properties to be auctioned were all condos they would make it “buyer’s choice”. This meant that the highest bidder got to choose from the remaining available condos. He or she also had the opportunity to buy multiple condos at the same purchase price.

The highest bid for the first round was $496,000. As expected, the bidder selected the 3 bedroom/2 bath townhouse in South Beach. I think the person paid fair market value for the property. I personally visited the townhouse this past weekend and it is in need of a lot of work to make it into a nice residence.

The second round of bidding ended with a high bid amount of $272,000. The bidder selected the one bedroom condo located at The Club at Brickell Bay. I was surprised that bidding went this high.

The highest bid for the third round was $230,500. The bidder selected the 1 bedroom/1 bath condo at Venetia Condo.

The 2 bedroom/1 bath condo at Blue Lagoon Condominiums was selected fourth with a high bid amount of $195,750.

The final condo to be selected was a 2 bedroom/2 bath at Grandview Palace located in North Bay Village. The high bid amount was $190,500.

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7 Comments on "The Results of Today’s Auction"

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in this auction format, do the buyers automatically get the condo they choose, or can the bank reject the offer?

Lucas could probably elaborate on this, but I don’t think this auction was absolute. For example the condo at 555 NE 15 St was previously auctioned in May; the high bid at that time was $235K, evidently that offer was rejected; I doubt they would accept a bid of $230.5, but we’ll see. I can’t believe someone approved a $610K 100% loan on the Brickell Bay unit, the tax assessment is only $292K, and the high bid was $272K. A huge lender loss, if the bid is accepted. That sale would be a good candidate for a fraud investigation.

is there also a 10% auction fee added to these prices?

Lucas Lechuga
This auction was not absolute. The bank has up to 7 days to review the highest bid. They can reject the offer if they feel that it is too low. The auction house states that 95% of their bid are accepted by the seller. I would think that all of the bids would be accepted by the bank because none of them are unusually low. I was not aware, however, that the Venetia Condo was previously auctioned. The bank is going to take a huge loss on the condo unit at The Club at Brickell Bay but that was their… Read more »
Lucas Lechuga

The buyer’s premium was a flat $3,000.

Lucas, Thanks for clarifying the buyer’s premium. In today’s big auction, I believe you mentioned there is a buyer’s premium of 10%. In the future, could you clarify what the buyer’s premium is ahead of the auction if possible? Because I assumed the buyer on Meridian paid $496k +10%, or +/- $550k, which I doubt is fair market value for this building today. I love this straight-talking blog – your postings on mortgage fraud are great. Rant away! And please copy the Herald on a few deals you know are fake. Speaking of straight talking, can you explain your role… Read more »
Lucas Lechuga
Kerry, Good point. In the future I will clarify the buyer’s premium for each auction. It usually varies depending on the auction house. The auction house typically pays a commission to a broker who registers his or her client prior to the auction if that client successfully closes on one of the properties being auctioned. The commission varies. Tonight the commission was 3% but smaller auctions typically pay 1.5%-1.75%. The buyer’s premium is the same regardless of if the highest bidder uses a broker or not. The buyer’s premium is a marketing cost that is passed from the auction house… Read more »

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