More than 100 bidders, looking for bargains in the area's slumping real estate market, crammed into a north Potomac neighborhood yesterday to bid on seven homes and one lot.
What they got after a heated auction were four- and five-bedroom houses for between $217,000 and $240,000 each. While those prices were as much as $148,000 less than the original asking prices, many bidders hoped to save more; many neighbors wish they had saved less.
"Let's face it," said one bidder. "Ninety-five percent of the people here want to buy a $300,000 house for $25,000."
But yesterday's prices shocked those in the Quince Orchard Estates subdivision who have already paid between $240,000 and $365,000 to the McLean builder, the Grimm Co., for the same models being auctioned.
Neighbors huddled at the outer edges of the auction and watched tens of thousands of dollars in their equity evaporate in the chill December sunshine.
"I can't believe they're going like this," said one homeowner, who paid $320,000 for his house in the 101-home subdivision five months ago. He asked that his name not be published because, he said, "I feel like the jackass of the year."
So-called "non-distress" real estate auctions increasingly are being used in the Washington area by some builders caught in the real estate market's downturn. Unlike foreclosure auctions, the often-hurried sales of financially troubled property, non-distress auctions are held voluntarily. The Grimm Co. is auctioning off 17 homes and 36 lots in five subdivisions. The next auction is scheduled for today in Leesburg's Potomac Crossing.
Ann Grimm said her company fielded hundreds of phone calls from would-be bidders in the weeks before the event. And the auction company, Delaware-based DeCaro Real Estate Auctions Inc., printed 7,500 brochures and still ran out. A line of bidders, each of whom had to bring a certified check for $20,000 or other documentation, stretched out the door of the registration area.
Auctioneer Daniel DeCaro perched on a sawhorse on the porch of one of the homes being auctioned to better see over the crowd of 101 bidders and 200 onlookers who gathered on the lawn and spilled out into the street. The bidding on each house started at $100,000, but escalated rapidly as would-be buyers thrust their pink bidding cards in the air in response to DeCaro's urging.
"This is a once-in-a-lifetime opportunity!" DeCaro shouted in between his rapid-fire chanting. "One twenty five! Who'll bid one twenty five?" he pleaded, then pointed at a pink card. "Yes! Now, how about one fifty?"
It took less than a hour to sell all the property.
Chanda and Duli Agarwal were thrilled when they successfully bid $234,000 for a house. Chanda Agarwal said she and her husband live with their two children in a town house they own nearby, but hadn't been able to afford a larger home in the area at the prevailing prices.
The Agarwals, who like other successful bidders also had to pay a 5 percent "buyer's commission" to the auction house, said they carefully researched the area and visited the houses set for the trading block a half-dozen times before the auction. Still, in the heat of the moment, Chanda Agarwal said she couldn't recall all the details of the house they had bought. She thought it had "four or five bedrooms. I don't know."
Mike Davis, a Silver Spring real estate broker, bid $217,000 for a house that he has arranged to sell to someone else "for a higher price." Davis, who declined to identify whom he would sell the house to, said he specializes in buying and selling property at foreclosure auctions. While the slow market has meant anguish for home builders and some home buyers who bought at the peak of the market, "for people who are very creative, it's great," Davis said.