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Foreclosed Houses Unloaded at Auction
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Jeff Wilson, 23, was not so lucky.
He lost the three-bedroom colonial he wanted in Fort Washington, just a few doors down from where he lives with his mother.
Early in the day, when the home first came up for auction, another shopper outbid him. But the financing must have fallen through, because an hour later, the house was back on the auction block.
In 2005, the home sold for $354,900 and it has more recently been listed in the $260,000 range.
"We're getting it at $185,000," he said, pumping his fist and jabbing his friend and real estate agent Jelani Jackson, who bought his home from the same firm in June.
For his effort, Jackson would have made a 1 percent in commission had the deal gone through.
But it did not.
Wilson had been pre-approved for a 30-year, fixed-rate loan insured by the Federal Housing Administration. But the appraisal on the house did not meet the notoriously strict FHA guidelines.
Wilson said he could have secured another type of loan if he were willing to make a larger down payment, but he chose not to. "I don't want it if it's not a steal," he said. "My back is not up against the wall. It's the lenders who have their backs up against the wall, not me."
Last year, the foreclosure situation was less dire in this region. In July 2007 , there were 16 foreclosures for every 10,000 area properties. Now there are 216, according to George Mason University's Center for Regional Analysis.
Yesterday, it was up to the lenders, not the auction house, to determine how low prices should go on these properties. Opening bids ranged from $1,000 for extreme fixer-uppers to $399,000.
Gordon and Dana Haraway -- who already own a home but want to invest in real estate -- bid on four homes before they finally clinched a two-bedroom townhouse in Alexandria for $160,000. They had toured it a few days ago.
But there's a catch. Their bid was below the minimum required by the lender. They'll now have to wait two weeks to find out if the lender accepts it.
Gordon Haraway, a loan consultant, said he does not mind being in limbo. "It is over, in the sense that it's out of my hands."
Dana Haraway, clutching their paperwork after having spent more than an hour with a lender, was less relaxed. "We had seconds to make up our minds about spending hundreds of thousands of dollars," she said. "My stomach is in knots."
