No minimum bid on this beachfront Kolea home (MLS# 237963) to be auctioned March 21
By chance last week, I blogged that the single family homes for sale at Kolea, a gated beachfront community on the Kohala Coast, look to me to be a best buy. That best buy just got even more interesting with yesterday’s announcement that the one I picked as my favorite of the Kolea homes for sale, the house on Lot 7, will be sold by Concierge Auctions on March 21, 2011.
Concierge Auctions is the firm that has done such a great job conducting live auctions at Kukio and Hualalai. (Remember the sale of Cher’s home?) Within 24 hours, I’ve had three marketing pieces announcing the sale…and one call about whether there really is no minimum bid (the auction company confirms that is the case). There are actually other luxury properties being auctioned off next month…but an auction is not an auction is not an auction.
Here is a quick buyer’s guide for readers interested in “buying a property at auction:”
Naupaka Lots 7 and 8, set for foreclosure auction, are shown between the green lot (MLS# 233826) and the residence above
The type of auction most in the news is the foreclosure sale. In Hawai’i, mortgagees can use either judicial or non-judicial processes to foreclose, but in both cases, the commissioner or trustee assigned sells the property at public auction. Often, there is no bidder at the flagpole, and the property reverts to the bank, which then puts it on the market with a listing agent.
These properties are sold “as is” and “where is.” The buyer should show up with a cashier’s check for 10% of their bid price, and should also be prepared to pay for all closing costs associated with the transaction (even those that would typically be the responsibility of the seller such as conveyance taxes).
Adjacent to Kolea is a small oceanfront gated community of only 11 lots called Naupaka Place. I’ve blogged that my listing in Naupaka is one of the few beachfront lots I know where the price of the most recent home sold in the community was higher than the cost of buying the lot and building. By coincidence, there is also a March auction date set for Naupaka Place…lots 7 and 8 are set to be auctioned at the flagpole on March 7th.
While Hawaii Life agents can represent a prospective buyer at a Concierge live auction, or on a non-judicial/trustee sale, we do not represent buyers on judicial foreclosures. The fine print on the sale of Naupaka Lots 7 and 8, as with any judicial foreclosure, is that the sale is subject to court confirmation.
Auction House Sales
In addition to the Concierge Auction’s sale of the Kolea residence, the local real estate franchisee of auction house Sotheby’s International is conducting an auction on March 12th of Big Island properties, both luxury residences and large ranch acreages.
Unlike with a foreclosure sale, the sellers have chosen to work with an auction company to promote the property and get buyers excited about buying…which means that the winning bid is not necessarily going to be a low-ball offer. Think about it. If I have a collection of Old Master prints for sale, I take it to Christie’s or Sotheby’s rather than put it on eBay or Craigslist, because they know how to attract the right buyers to bid up the price!
The bottom line is, whether you are buying Hawai’i real estate at auction, or looking at properties listed in the MLS, it is important to know what the property should be worth in this market and in the long run. Know what you are willing to pay for it, whether that is a “low-ball” offer, or one that is fair today and smart in the long term.
I have my own view of the “right prices” for the Kolea and Naupaka properties up for auction, as well as some views on what that will do to other properties listed. As I said a week ago, there are best buys to be found at the beach in Waikoloa Beach Resort…and without the carrying costs associated with Hualalai and Kukio amenity programs!