Winning an auction by losing

|

Just had an interesting experience at probate court.

Jon and I had signed a non-contingent deal to purchase 229 N. Burlington St., which is a triplex south of the 101. It’s on a big lot that’s zoned for six units. We were intending to renovate the existing building and build two more units… the numbers would have been pretty great.

However, none of our usual partners were interested in backing us on this particular deal, mostly due to lack of confidence in the neighborhood.

As with most probate sales, this one required court confirmation. That means there’s an auction in front of a judge, where other bidders can come in and steal the property if they’re willing to pay more than the initial contract price.

So, we were in an odd position: If we won the auction at court, we’d need to raise the money to buy the deal in smaller chunks (say, $50k-100k) by Friday. I thought this was doable, but likely to be pretty unpleasant. The alternative would have been to walk away from our $58k deposit.

As luck would have it, two other bidders showed up at the auction. When the judge asked if either would bid above our $580k contract price, one did. Then the other jumped in. I kept my mouth shut. Within a few minutes, the deal had been bid up to $660k, which is where it settled.

So, our deal is off and we get back our $58k. It’s a weird feeling to lose an auction and be (reasonably) happy about it. But that’s how I feel today.

Share