You’ve heard it. You’ve seen it. You may have even salivated over it.

An auction can provide entertainment as engaging as any soccer match sponsored by Fanta—unless, of course, it’s me being auctioned off as the “booby prize.” That can get downright boring and I’d spare my worst enemy any resulting trauma.

We often think of auctions in terms of Sotheby’s auctioning off high-falutin baubles, fashion Voguies, and artistic bogeys to benefit desperate aristocrats and maybe charities too if the Seller’s a rich saint like Princess Diana. We might think in terms of the tense drama of a televised event like Mecum’s Auto Auctions. We might even have attended a local farmer’s auction selling livestock from pricey thoroughbreds to a goat going for a $10 bill before it has a chance to eat that engraving of Alexander Hamilton.

But the auctioning of real estate remains as old as the concept of real property itself; and now, ladies and gentlemen, you’ll soon see it advance to a whole new level.

WHEN TAXES COME DUE

Californians, living in the home of the “blessed revolution” of the  Proposition 13 property tax revolt, continue to complain a lot about their property taxes, largely because high levels of assessments result in Homeowners getting bludgeoned with high tax bills. Percentagewise, however, California has the 16^th lowest property tax rate in the nation at .76% while New Jersey imposes the highest rate at 2.49%. With California’s median statewide property value standing at $505,000, that translates to $1,644 per annum. Of course, a lot of property tax bills in places like Orange County swell much larger, seemingly like a bomb about to burst before the 4^th of July, precisely because assessed values follow market trends as they blast skyward. We’ve already seen this year how the median home price in Orange County shot past 6 figures so fast that Elon Musk might consider it as fuel for his rocket boosters.

It’s enough for a proactive Homeowner to consider selling and moving to a state like Colorado where the median home price stands at a paltry $142,700 with a property tax rate of .41%, making the annual property tax bill a more gracious $895. But let’s say that a Homeowner has faced a special hardship and can’t move. Let’s say that this Homeowner has lived alone and has suffered a prolonged illness that prevented meeting his/her/their obligations at tax time. The property automatically goes into tax default

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It’s a serious matter to fall behind on taxes because taxes come first in line for any payoff including any mortgage debt payoffs. Fortunately, by time the State sells a tax deed on a property at auction, that property has been in default for an average of 3 years, allowing for redemption of the property. Buyers of tax deeds must be registered to bid and must present a winning bid. These auctions can attract a bandwagon of wannabe land barons; but success at such auctions requires careful research, readiness to cover any other encumbrance, and be ready to decisively present a meaningful bid.

The Orange County Tax Collector doesn’t frequently hold tax auctions. The last one took place on Wednesday, August 18, 2021 and it was done online.

Hold… that… thought.

THE FRIGID FORECLOSURE CLOSEOUT

More common auctions pertain to foreclosures on unpaid mortgages in the form of Trustee Sales. Each Wednesday during the Great Recession, a group of people would stand in a circle in front of the Orange County Courthouse while an auctioneer called for bids on the sale of properties in foreclosure. Some privately expressed that they felt like vultures, which metaphorically, they were.

But most of those properties putrefied as economic carrion because they had been encumbered with behemoth sums of outstanding mortgage debt while the value of those properties had fallen below the amount of money owed on them: a condition, popularly called, “underwater.” This resulted in only an occasional bidder presenting a cashier’s check to buy a foreclosed property. Most of the time, the somber auctioneer kept announcing the close of bidding on individual properties by saying, “Going once… twice… back to the bank.”

But Trustee Sales still happen in the same place on various days and many of them still show unpaid balances the size of the planet Neptune. Loss of property through a mortgage default can cause just as much heartbreak and injury to credit as does a tax default.

The solution? The troubled Homeowner must act proactively and decisively, preferably before receiving that dreaded Notice of Default and Election to Sell in the mail from the mortgage Servicer. If you find your property headed toward auction like the Titanic plowed toward that infamous iceberg over a century ago, why not make the dynamics of a real estate auction work for you?

Not only is this possible, but it’s highly recommended.

BIDDING DYNAMICS

Highly successful real estate property auctions have been done in conjunction with open houses. Mariella Agrusa, the Broker for Le Rêve Realty Group and now for irealtyshop, has done many of these, especially for probated properties requiring a high return to benefit the interests of strapped and burdened Beneficiaries. Here’s how that works:

1. A Seller must determine a reserve amount. This is the minimum amount the Seller would accept for any sale of an individual real estate parcel to happen. This reserve isn’t the same as the higher listed price. Determining a reserve calls for consultation with a real estate professional who’s able to gauge what can be expected of the local real estate market. This gauging through examination of recent comparable sales and pending transactions, also called, “comps”, will enable a determination of the market value of the individual property.

2. The property is prepared for showing to prospective Buyers. This sets in motion preliminary procedures for selling. A clean, sharp looking property with good curb appeal attracts more willing and able Buyers. This probably won’t require a huge investment compared to the return on the higher sales price commanded thereby.

3. The Broker, as Agent, arranges and advertises an open house, noting in her advertisement that this would be an “auction style open house.” While Buyers and their respective Agents view the property, they’re encouraged to submit a written bid on the property, appealing to the listed price. Buyers who love the property will buy from the heart and will be able to see that they have competition, resulting in a bidding war.

4. The highest bidders are notified in succession, and their Agents must submit legal Purchase Offers within a reasonable period of time, based upon the bids to which they had committed themselves during the open house. This often reaps spectacular results for Sellers. I’ve seen Mariella secure bids thousands, even tens of thousands of dollars over the listed price and far, far above the Seller’s reserve.

There’s no reason that a Broker must do the entirety of this work, and that could mean even more money for you as the Seller.

ENTER NEWER INTERNET TECHNIQUES

Remember how the Orange County Tax Collector did its last auction of tax-defaulted properties online? Nobody ever said that such auctions had to be done in person, even though this has been traditionally the way Orange County has handled Trustee Sales. Why not take the auction idea online yourself as Seller?

More than that, virtual open houses have become a fixture of real estate sales for a couple of decades now. Potential Buyers can do a walk-through online to view what they can expect in your home. In many cases, a Seller or Agent can incorporate staging in which an empty home can be fitted with temporary furniture to demonstrate how the home may look when occupied. Property Managers also use this technique to market large condominium and apartment complexes, furnishing representative units as models for prospective Buyers and Renters.

Internet-based auctions can be incorporated with virtual open houses in much the same way as the in-person auction style open house. The trick is in the timing. The limited time of the auction style open house drives it to work as well as it does. The limited time instills fear that a deal can too easily slip away. The Seller or Agent must orchestrate the online experience in such a way that it imposes the same level of urgency.

OPTIONS IN THE SHOP

This opens up the variations in service afforded to you as Seller through Mariella’s new company, irealtyshop. Sellers have varied degrees of competency which they can harness in various ways while saving thousands of dollars. Here’s a list of the packages available to you from providing only advertising on the Multiple Listing Service (MLS) to the traditional full service of a REALTOR® and with numerous grades in-between:

Package Services:

1. MLS Only. This level gives you, the Seller, exposure on the MLS. You can handle the sales arrangements yourself. This can provide you the highest level of return on your sale.
2. Broker Assist Service. This level assists you, the Seller, in those documents you may find intimidating and possibly advise you concerning how you might approach your sale. This enables you to approach your sale with greater safety.
3. Full Service. This follows the traditional model of commissioned real estate brokerage by which the Broker provides you maximum protection as your Fiduciary.

Or…

4.  Order A La Carte. Your needs may consist of any combination of the first 3 services. Face it. Everyone is different. Order exactly what you need and pay accordingly. It’s like hiring the services of a Paralegal when you don’t need the full scope of an Attorney’s help. It’s like shopping at a real estate store…the concept of an “I”-Realty-Shop.

It’s easy to see how a Broker Assist Service or A La Carte can greatly help many Sellers to affect an online auction of their homes. Mariella’s decades of real estate experience and expertise remains behind Sellers every step of the way as far as they need her services.

YOU’RE IN CONTROL

Meanwhile, it costs you nothing to consult Mariella concerning your options as a Seller. Successful sales and successful auctions require careful planning and attention to detail in their execution. That includes that first step of determining what your home is worth and to determine what you’re able to accept. Whether you’re experienced in real estate sales or a complete novice, you owe it to yourself and to your family to seek out and learn from the best in Southern California real estate.

What makes Mariella the best? Consider her specialties. She has worked with the courts to make sales happen for probate and divorce cases including some really sticky ones. She has negotiated the short sale, enabling sales of properties for less than the amount owed on mortgages. She understands the tricks that Lenders pull, having worked as an Analyst for the federal government’s Office of the Comptroller of the Currency. She has taken Agents under her wing as a fully licensed real estate Broker and a member of the Pacific West Association of REALTORS®. She’s licensed by the Nationwide Multistate Licensing System (NMLS), required for those who engage in mortgage brokerage today. She’s a Broker member of the Orange County BAR Association. These are impressively broad credentials that not many Agents or Brokers will be able to match.

Call Mariella TODAY at 714-292-2594. Learn more about the details of irealtyshop and determine the program that’s right for you. Let her help you draw up your plan. You’re in control. You’re the Driver of your sale. Make it happen.