As more homeowners and builders fall into foreclosure, many of the properties they let go of wind up on the auction block, where house hunters willing to do some advance legwork can land some terrific bargains. “It’s not the house’s fault or the condo’s fault that it’s being auctioned,” says Rick Levin, the head of the Chicago real-estate auction firm Rick Levin & Associates. “It’s typically the owners’ fault—they couldn’t make the payments. There’s not a problem with the home.”
Levin’s company has an auction of about 100 Chicago-area foreclosed homes coming up next week (on April 10th). If you’re interested in trying to grab a bargain there, today’s the day to get started. Start at Levin’s website, where you can learn how property auctions work. Get more information here and here. Be sure you fully understand the process. At most auctions, all properties are sold as is, with no contingencies and no post-auction inspections. You will sign a contract on the spot and close about a month later. There’s no room for backing out. “We can hold buyers’ hands a little bit,” says Levin, “but we expect them to have the intestinal fortitude it takes.”
If you can handle that pressure, go to Levin’s list of properties to be auctioned. Before the day of the auction, you will want to drive by and, if possible, walk through the property on which you plan to bid. Levin’s staff will have open houses at all the April 10th properties this Sunday, April 6th. Levin says that, with advance notice, he can also arrange to show properties at other times. This step is a must: the auction brochure contains only some basic details, such as the property’s address, the number of bedrooms and bathrooms, and the lot size.
The auction itself will be held at 2 p.m. on Thursday, April 10th, at the Hyatt Rosemont, 6350 North River Road in Rosemont. There is no charge to attend, but you have to register and bring a cashier’s check—$5,000 for some properties, $7,500 for others (the list of auction properties tells you which amount is required). You only hand over the check if you are the successful bidder on a property.
Just as the foreclosure crisis has so far hit hardest on lower-income homeowners, Levin’s list of properties is heavy on low-cost properties in modest neighborhoods on the South Side and in such suburbs as Dolton and Calumet City. A lot of them are valued between $150,00 and $200,000. But the list also includes a handful of higher-priced properties, including:
- a townhouse in Edgewater that was priced on the conventional real-estate market at $1.1 million (Levin’s suggested opening bid on April 10th: $535,000);
- a Humboldt Park three-flat whose price was $759,000 (minimum bid: $279,000);
- an Oak Park single-family home whose price was $498,000 (minimum bid: $238,000);
- a Northbrook townhouse whose price was $419,000 (minimum bid: $175,000);
- a townhouse in west suburban Geneva whose price was $349,000 (minimum bid: $180,000).
If there is nothing at this auction that works for you, don’t worry: Levin expects to get many more properties in the next several months. “We used to auction houses for couples who were divorcing, or the estates of homeowners who died—things like that,” Levin says. “Now the foreclosures are taking over.” Levin estimates that they account for about 60 percent of his firm’s inventory. And if you do buy a house at this or any other auction, I’d love to hear your story. E-mail me at email@example.com.