Our first question to the auctioneer when we walked into the house, the monday prior to the auction, was “Why an auction…why not list it.” He gave us the answer we were looking for. The home owner had owned the house for 40 years. It was too much for him to handle and he was downsizing to go live near his kids. He knew it needed to be updated but didn’t want to deal with it. He also didn’t want to wait 3-6 months for his house to sell. He was retired and had living to do. He wanted it gone quick. It was paid off and he was ready to leave it.
….So the hubby and I prepared and decided how much that we wanted to spend. We did this by calculating what we wanted to put into the house and we used comparables in the neighborhood to evaulate its current worth and potential worth. We did some serious research. All of that led to our highest bid price. Now, let me explain that I will not be telling you any of our financial decisions. I really think its important to keep that private. I will share how we prepared to bid…without sharing our actual bid. I am sharing our expereince just in case yo u might want to bid in a real estate auction.
Here was our mentality….
- We were not in a hurry to buy. We like our rental and are fine staying here for longer. We recognized that houses do not sell often on this street and do not sell for cheap. This was a once in a 30 year opportunity. We will be looking for houses after the first of the year, but not right now. This house was worth bumping up our house buying time a few months.
- I didn’t have to have this house. It had my heart but it didn’t have my world. If we got it…AWESOME. If we didn’t, it wasn’t meant to be. I have a strong faith in God and I know that He will place us where He wants us to go.
- We were going to buy a steal. That was the goal. We were not going to buy the house…even at the price it should be listed in a traditional sale, in its current condition. The price it should have been listed at was still a steal. (hint: we used comparables to figure this out) We wanted to buy it under that great price. The only way we could justify getting this house is if were a major steal…more than it already is.
Here is the reality
- What you bid isn’t the actual price of the house. You have to add a 10% commission fee to the auctioneer. The final price of your house (your loan amount) would be your bid + 10% commission. So if you win with a bid of $100,000 then the sale price of the house is actually $110,000
Lee came up with a bidding chart for me to use while bidding. This is how I would know how much I was really spending when I placed a bid. I am not sharing what I bid…or where we were comfortable…but this was my tool I had in hand. If you do this, I suggest you have something like this with you.
Lee and I then determined what our last bid would be (based on how much we actually wanted to pay for the house). We then called and got financial advice from a few people we trusted to make sure we were making a wise decision. These type of people are important. Everyone needs to have them. They know us and what we financially can afford and we trust them. If they would have said “I wouldn’t do that” then we would have listened. Its called good accountability and I am thankful we have people who care about us. Financial stress overflows into a marriage and my marriage is more important than any house or thing I could ever own.
Auction day came and I got there early. I signed up for my bid card and then looked around the house one more time. I also was checking out my competition. There were around 60 people there. I was intimidated. This is a lesson to never judge a book by its cover because I had pegged about 10 people I thought were real estate investors ready to gobble up this house over little ole me. I am sure they thought I would never be a bidder. I had skinny jeans, high tops, a long sleeve t-shirt and my hair partly braided. I sat on the back porch on the left side and called Lee. My first words were “we don’t have a shot.”
The auction began at the front of the house and the bidding started. Lee had warned me the auctioneers would start high and then keep dropping until finally they allowed someone to make a bid. Their job was to get the owner a good sale price. Their job is to work the crowd looking for more bids. Lee was on the phone ready to help me but he was on the road and couldn’t hear me well.
Finally, the first person made a bid. The first bid made was exactly what I was hoping for. It was the area that I was comfortable to start bidding. As per my husband’s instructions, I was to wait. A bid price that low that is when people engage. He wanted me to watch and see who engaged first. If too many people engaged it was a clear sign that we would not be getting the house. No one engaged….the auctioneer kept singing…I was whispering to Lee and then one other person engaged and bid $5,000 higher than the first bid. I watched. My heart was pounding. When do I get in? You couldn’t buy land in this neighborhood for this amount. I was ready but my husband said “wait”. No one engaged. The auctioneer said “going once….” and I said to Lee quietly on the phone”…only two bidders have engaged…the one who started it and the one who made the next bid. Its obvious the first bidder isn’t going for this house.” Auctioneers draw out the “going once, going twice, sold” statements. In between each one they plead with the crowd to get more bidders. I had enough time to talk to lee but not much. Lee heard this and said “Bid” Literally the auctioneer had said “going twice” and I spoke up and said my first bid. I was now the high bidder and I was in the game. A few people turned to look at me as if to say “the girl in skinny jeans is bidding?” Where did she come from? Needless to say my heart was pounding.
The other bidder was on my left side. I had to be quiet in my conversations with Lee so they wouldn’t hear what I was saying. The entire crowd turned toward us, as if to say…this is where the action is going to happen today. We were both on stage and I was keeping my cool on the outside and about to throw up on the inside. To spare you all the little details I will tell you I was one of only two bidders. On three different occasions I was the highest bid and the auctioneer said “Going twice….” and then the other people bid. All of those were at prices that were absolute steals. Like, record breaking house price. The other bidders were contemplating it just as much as I was after each bids. The bids were not fast and furious. They were very reflective and calculated. I tell you that because it meant that with every bid you didn’t know if they were going to bid again. A fast bidder reflects an “I can outbid you all day” attitude. I felt the entire time I could maybe just get this thing.
My husbands good friend showed up with his family half way through. I was the highest bidder and he jumped in to help me. Really, just give me moral support and strategy. I was thankful he was there because he was like a good coach. When I was reaching my highest bid, the point where lee and I had said “no more” my coach told me to keep my phone to my ear. To make it look like I was getting another bid ready. Thanks coach.
I placed my final bid. The highest bid that lee and I said we would go, and keeping my ear to the phone waited and hoped. It took 5-6 minutes of the auctioneers singing for my competition to deliberate. It was probably their last bid too. The house was about to sell to me and they bid $500 higher than my bid. I shook my head at the auctioneer to tell him I was out and he quickly said “Sold” to the other bidder. He knew that if I was out it was over. That $500 haunted me for about ten minutes. I look back and if they only were bidding $500 more dollars than my highest bid then they were just inching over me to get it. I think I could have won if I would have bid $500 over them, which would have been $1000 more than we wanted to pay. $1000 more on a home loan is nothing but I wanted to honor my husband. He came home and told me he would have upped the bid $500 more just to see if they were really out. He then said, you did the right thing.
My husband is a closer and a good reader of people. I think we would have won the house if he was there. The reality is, that he was not and it was important for him to be where he was. It was all part of God’s plan and guess what….It wasn’t meant to be. I walked away with a smile on my face. I said a prayer for the family who bought it to have wonderful memories there and went with my “coach”, his wife (who is a close friend of mine), and their kids to get a burger. I came home, took a nap and was thankful to have a roof over my head.
There is my story of the house that got away. Maybe I should call it the house that wasn’t meant to be. That feels much better.
Thanks for reading,