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Auction part 2 – the painfully slow bidding

by sfishome on February 25, 2009

This is the middle of 3 videos (How it Started is here, The anti climatic end is here). This one you hear their pitch for why anything up to $710,000 is a great buy since unit #1, the window immediately above the crowd, sold for $710k in October. That really won the crowd over as you can hear.

There were quite a few anecdotes indicating these guys really didn’t know the San Francisco TIC market. One of the “dudes” (the auctioneers – there were about 4 of them with assorted other characters who seemed like groupies) was telling a Buyer how 6 unit TIC’s were great because you could convert them to Condos… he said it like it was a piece of cake. Someone nearby jumped in and explained the lottery, and the “dude” seemed to back down.

At the end of the auction another “dude” said the City of San Francisco would have no choice but to green light all current TIC buildings to Condos conversion to generate revenue. Between the two comments, you had to wonder what else they were telling uneducated Buyers that they might believe. Is that what they told the Buyer of unit #1? (update/correction – the auctioneers only got involved recently AFTER the sale of #1 was long over, so they obviously didn’t influence that sale) I sure hope not, but something has to explain why they’d pay $710,000 when the “free market”, eg a rag tag group of bidders and spectators, says these units are only worth $410,000. (update, #1 sold with a parking spot, and they had Buyer representation by an agent with a South San Francisco address and a San Mateo web site – knowledge is power, local knowledge especially, and they didn’t hire a local, and doubtful the agent had any TIC experience which is critical).

The other item they admitted to getting wrong was telling Buyers, in the days leading up to the auction, that Bank of Marin would do 10% down loans. The truth…. which they glossed over… is that they require 25% down unless you have a credit score of 740 or greater in which case you can get away with 20% down.

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Pac Height auction at 2077 Jackson
April 29, 2010 at 4:53 pm

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