Steamboat Springs When the Internet auction of a foreclosed Stagecoach home in Morningside subdivision wrapped up Feb. 14, it appeared there would be no “sweetheart of a deal.” More than two months later, it’s a different story.
Tyler White and Diane Hull were able to close Tuesday on the three-bedroom home at 22639 Comanche Road for $235,000.
“Purchasing this home was like obtaining instant equity for our clients,” said Martin Dragnev, of Colorado Group Realty. He and colleague Joy Rasmussen represented the buyers in the transaction. Cindy MacGray, of Prudential Steamboat Realty, was the listing agent.
Dragnev explained that a bank appraisal valued the home at more than $300,000, which meant the purchase price afforded them about $65,000 in equity on closing day.
“It reflects very well on our market right now with all the great opportunities for buyers out there,” Dragnev said.
MacGray’s client was North Carolina-based Protium REO I LLP, which acquired the property from Sutton Funding LLC. The acronym REO stands for real estate owned property, signifying that it has been acquired by the lending bank.
Growing impatient with the pace of showings on the property last winter, Protium asked MacGray to pursue an Internet auction through www.realtybid.com.
The minimum opening bid for the 2,500-square-foot home, which was listed for sale at $565,000 in early 2009, was $130,000 with a blind reserve price. The auction drew only a few low-ball bids and apparently never came close to the reserve price, though MacGray said she was never made aware of it. Still, she said, the auction ultimately served its purpose.
“The unknowns of the auction process was difficult for a lot of people, but it generated a ton of interest,” MacGray said. “Before, they weren’t looking at it, and what the auction did was to encourage people to look at it.”
Dragnev confirmed that his and Rasmussen’s clients first learned about the home that was built in 2006 through a newspaper article about the auction.
“We were hesitant to participate in the online bidding process for numerous reasons, one being the high fees involved going to the realitybid.com website,” White said. “We were also very uncomfortable with the time frame of the auction, which did not allow us to adequately do our research into the property.”
White said the conditions of the online auction struck him and Hull as unconventional. They estimated that they would have had to risk more than $10,000 in the event that they failed to meet one of the auction company’s conditions.
It’s apparent that other interested potential buyers felt the same way. MacGray said she received three offers on the home during the last two weeks of February.
White and Hull (who work in the hospitality industry) had been looking for their first single-family home together since December. Hull said there were plenty of ups and downs along the way.
“It was like a roller coaster. There would be times where it was going very smoothly, but then again we would always hit that bump in the road,” Hull said. “Martin was always there for us in any way, which was always a great help.”
Dragnev was feeling the drama, as well.
“The process was long and thrilling,” he said. “From the moment of our clients seeing the article on this home in the paper, the challenging and confusing online auction process, having three competing offers on the table with ours being last in line, to having all the other interested parties drop out eventually and closing on the home last week.”
MacGray said White and Hull prevailed in part because they had been diligent in getting financing in place before the competition for the home reached a climax.
As of this week, she said she was surprised to confirm that there were no more than 10 bank-owned homes close to Steamboat Springs on the market. There is potential for 15 to 20 more short sales as of late April, she added.