Auction Time Again

Posted by Dave Fratello on Friday, November 9th, 2012 at 3:03pm.

We don't do auctions in MB much – well, not true auctions. Bidding wars that look like auctions, sure.

But a true property auction is coming up Sunday, a probate auction that will be the first like this that we've seen since December 2009.

It's at 1761 Voorhees (4br/4ba, 3325 sq. ft.), a 1990 Spanish-inspired home just a couple of doors off of Aviation in furthest East MB.

On Sunday afternoon at 4:15pm, the flag will drop at the property and bidding will begin.

Last time we saw a public probate auction in Manhattan Beach, the whole deal was done within 90 seconds. (See "Probate Auction Ends at $805k.") So get ready for that this time, too.

At Voorhees, they had just one public open house, last Sunday, and suffice it to say the place was crawling with people throughout the 2-hour period it was open. You could not park on the block. People spilled into the street.

We were hoping to snap some photos of the property, but couldn't do it without getting a member of the public in the pic. People weren't there to get famous on MBC, so we held back.

How is the property, though?

So darn original (1990) and worn down that it needs absolutely everything. It's a shell of an 80s house inside. Where, perhaps, the original materials have been replaced along the way, like with faux-wood flooring or the speckled tile floors in other places, it's just all got to be replaced again. Big time. Doors, windows, the kitchen, all the baths. It needs everything.

At the open house, it sure looked like people were drawn from all over on the false promise that there's some kind of screaming bargain to be had at Voorhees.

We'll attribute that to the "dummy," or placeholder, price of $899k that the auction company slotted in. 

But no, 1761 Voorhees is not going to sell for $900k. Did you notice it's an auction?

The major question here is: After remodeling, what's this one worth?

Let's look at some similar sales. The house itself bears a layout we've seen a few times this year at other places, so we'll focus on homes with that floorplan. There were probably a few dozen of these models sprouted around MB in the 80s and early 90s. Recent trades of homes with the same layout:

1451 5th: $1.589m in Dec. 2011
1451 5th ($1.589m in Dec. 2011) had a newer kitchen, nice hardwood flooring in some areas and was super clean and functioning when offered up a year ago. It wanted updates but was fine.

947 10th (MB Hill Section): updated with some style, $2.100m in May. That's a Hill Section price. The buyers have also commenced a remodeling project, maybe to remove some of the more flowery aspects of the style and to give the exterior a much-needed improvement.

1555 Voorhees (5br/4ba, 3825 sq. ft.) is the most recent sale with this layout, same street but a far superior location along it, nicely perched on a steep upslope to give the home notable city/mountain views. Last remodeled in 2007, this one fetched $1.760m just 2 weeks ago in late October.

Roughly speaking, those comps suggest a final value for 1761 Voorhees – after the remodel – in the $1.550m-$1.7m range in today's market. Probably toward the higher end, just depending on the degree to which location punches it down.

So for the auction, the question becomes: What's a reasonable acquisition price?

This is literally THE question in play at the auction.

To us, it's all shades of $1.3m.

You'd love it lower, but if you can buy it under $1.4m and do the work efficiently, you might move in by mid-2013 and not be underwater.

Buyer beware: If you "win" and get a huge deal at the auction, guess what? You may not "win."

Because the winner goes to court where the sale must be confirmed. (Click here for all the messy fussy details about the auction process.) Anyone else can overbid the property at that court date. Saving grace: Competitors must go up by 5% at least, more than $60k on top of our projected auction "winner's" price. That's a disincentive to new bidders.

We'll go check out the auction Sunday, and maybe see some of you there. Plan ahead for the parking crunch so you don't miss it.
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