For newcomers, it feels like walking in on a complicated game without a rule book.
Every Friday morning, three or four dozen people, mostly men, gather on the plaza outside the second-floor entrance to the County-City Building on Tacoma Avenue, sipping coffee from paper cups, whispering into cell phones and flipping through sheaves of printouts.
At 10 o’clock sharp, auctioneers in different parts of the plaza clear their throats and begin to call out a quiet singsong of street addresses and loan numbers, ending with: “Do I have any opening bids?”
Clutches of bidders shuffle forward, eyeing each another suspiciously.
In the real estate foreclosure market, this is the central drama, where properties in arrears are offered to the highest bidder and – at least supposedly – fortunes can be made.
They’re called “crying sales,” not because anybody is actually crying, but because of the ancient way they’re conducted, with auctioneers hired by title companies and other trustees publicly “crying” the sale.
The idea is to give everybody an equal chance at buying property. In reality, it quickly becomes clear that those who know the rules – where to find the homes, how to pre-screen them and how to pay – have a big advantage.
Things have changed, though, says Dave Swadberg, an auction veteran who says he’s attended auctions since the 1970s and “fast and furious” throughout the 1980s.
“Back then, very few people were involved,” Swadberg says. “It was always the same group of guys. We started calling ourselves the 40 thieves.”
The rising tide of foreclosures over the past year and a half has brought hundreds of newcomers into the fray, all hoping to land that killer deal: valuable property for pennies on the dollar.
These days, with all the information readily available online, and so much competition, the chances of a killer deal are much lower.
“I don’t bid on anything unless it just screams out at me,” Swadberg says. “The problem is, if there’s anything good, other people are going to be bidding on it.”
Auction rule No. 1: You have to have cash on hand or a cashier’s check to qualify. You can’t just blithely bid and say you’ll run to the bank later.
The sales proceed at baffling speed. Bids start at the bank’s minimum and rapidly work up in $100 increments.
In five minutes, most are over. “Going once,” the crier says, “Going twice, sold.”
By 11 a.m. on a recent Friday, most of the bidders are gone and a single crier remains.
She announces the sale of a property on Fairbanks Street in Tacoma. The bank was owed $186,000, but in a late decision it notified the trustee that it would drop the opening bid by $100,000, to just $86,000.
The only bidder is Kyle White of Port Orchard, a quiet man in a stocking cap who’s been standing off by himself. He takes the place for $1 over the minimum: $86,001.
David Bruder, an agent with the University Place office of Foreclosure Solutions, is beside himself in frustration.
“You missed a screaming deal,” Bruder says to an associate, emerging from the courthouse door munching from a bag of chips. “That place on Fairbanks went for a dollar over minimum.”
“Why didn’t you buy it?” the man asks.
“Our hard-money guy left,” Bruder says. “We were done. It popped up at the last minute.”
“I wish I’d known,” the guy says, pulling an envelope out of his jacket pocket “I’ve got a half a million dollars here.” He produces a fan of cashier’s checks.
He shakes his head.
“I was inside buying Cheetos,” he says.
White, the successful bidder, was subdued. He drove by the house before the sale, he said. The neighborhood is scarily bad, the house a wreck.
“I’m not so sure it was such a screaming deal,” he said. “We’ll find out.”
FORECLOSURE EXPLAINED
Foreclosure is what happens when you get behind on your home mortgage payments and your lender wants his money. If you don’t figure out some way to pay, your ownership will be terminated and your house sold at public auction.
In most cases, lenders don’t start the foreclosure process until you’ve missed at least two monthly payments. Three is more common.
In Washington, foreclosure usually starts with a “Notice of Trustee’s Sale,” a document your lender files with the county auditor. That document instructs the trustee who holds your deed to sell the property in order to satisfy the debt. You have 90 days to make good before the sale.
You can stop the foreclosure by bringing your mortgage payments up to date (plus penalties, fees and expenses), by selling the property yourself, or by negotiating new terms with the lender.
Rob Carson, The News Tribune
