Currently, Redondo Beach has listed not one, not two, but three properties going to auction!
Well, two of the properties are in Torrance (Hollywood Riviera) but with Redondo Beach mailing addresses. Nonetheless, clients always get excited about auctions.
This week, I want to break down the style each of auction listings present, along with how to quickly analyze which property might be the one for you.
Let’s take a look at the three properties:
Probate Auction with Court Confirmation
- 456 Camino De Encanto, Redondo Beach
- 4 beds, 3 baths, 2,505 sq. ft. 7,322 sq. ft. lot
- Asking Price: $2,111,000
A probate auction with court confirmation is a unique property sale that we do not see often in the locations covered in this blog.
Over-simplified, a probate auction with court confirmation is an owner of a property who passes away without a will. The property is listed and sold to an initial party, but before it can be sold to that party, a judge holds an auction at a later date to ensure the property is getting fair value on behalf of the estate.
Normally, in California, the judicial auction starting bid is 5% premium and a $500 fee higher than the current offer in escrow. There is a lot more nuance from cashier’s checks to deposits to no contingencies to short time frames, but that would take a whole separate blog to cover.
High-End Luxury Auction
- 124 Via Monte D’Oro, Redondo Beach
- 6 beds, 7 baths, 6,756 sq. ft., 22,764 sq. ft. lot
- Asking Price: $8,995,000
This is a Concierge Auction which is a well-known luxury auction service. They are normally hired to help owners of expensive or unique properties that are having a hard time selling.
Oftentimes, it is a seller that wants an aspirational price for their home, and this service is hired when they throw in the towel and are ready to finally sell at market value…via a well-marketed, highly exposed website, and a multiple day auction.
Probably the most famous Concierge Auction in the South Bay was 1 Buggy Whip Drive in Rolling Hills that asked between $40 million and $58 million over five years before selling at their auction for $22 million in 2018.
Non-Distressed Auction
- 803 N. Paulina Ave, Redondo Beach
- 6 beds, 7 baths, 6,066 sq. ft., 8,420 sq. ft. lot
- Asking Price: $3,000,000
This is a non-distressed auction. Essentially, it is like any other listing with a strategy to underprice a listing on purpose to induce multiple offers to find the best and highest price for their sellers. Only this is marketed as an auction and the property is sold in auction format in person or on an online platform.
This is something one sees today with most properties listed on the MLS (controlled by an agent with multiple offers) but pushed in a truer auction style in hopes of creating even more excitement over a unique process.
Analyzing Each Property Quickly
So, how to you begin to analyze and figure out which property is for you?
456 Camino De Encanto
Since this one is going to auction in front of a judge, that means someone is already in escrow on the property at a lower number. They beat you to it.
That said, sometimes the property is mis-marketed and in escrow for too low of a price…or the court confirmation sale has been delayed, allowing the market to go up and make for a great deal. But, buyer beware, you must bring a 10% deposit and there is no due diligence period or turning back, or you risk losing your deposit.
You need to be a sophisticated real estate investor or contractor with cash to pull off one of these sales.
I have purchased one probate sale with court confirmation in my lifetime, and boy, I can tell you there are a lot easier (and less risky) ways to make money in real estate. The professionals that specialize in this do make a very good living…but it is tough work.
124 Via Monte D’Oro
This auction is normally selling a high-end luxury home with specific challenges or a historical art piece that is difficult to value.
I believe Via Monte D’Oro is a little bit of both.
Not only is this home a beautiful, historical piece of art reflecting South Bay history only desired by a select few, it is also a massive residence on a triple lot in an area that does not have sales anywhere close to its past asking prices (or asking price of today).
There are unique challenges for this home within its own market and it is a piece of art that requires love, attention, and money to maintain properly.
You need deep pockets with no ROI expectations, an affection for classic architecture and design preservation, and an understanding of what the historical significance of this residence is to the South Bay.
803 N. Paulina Ave
This is auction is a “controlled” auction that you see most Realtors run throughout the South Bay (including myself).
I believe that this property is a simple numbers calculation for just about any buyer. The asking price is $3 million for a massive 6,066 square foot home. That is under $500 a square foot.
Considering the crazy run up in lumber and commodity prices, this home is priced at about replacement value for most retail buyers. So, essentially the lot is getting thrown in for free.
What updates would you want to make here? What do you feel is land value? And then of course, are you willing to pay extra for the awesome views and location?
There is a lot more nuance to valuing this one, but it can be done by most buyers and their agents without a problem. The winner will open a normal escrow and have the opportunity to capture a home with lots of potential at perhaps an excellent price.
Have a great weekend and Happy Mother’s Day!