I got an e-mail this morning from Jon Vaughn, a Bakersfield real estate agent who attended Tuesday night's auction of more than 80 bank-owned (foreclosure) homes.

I wrote about auctions for Monday's paper, and I thought you guys might be interested in hearing Vaughn's impression of the event. Here are his thoughts:

Well, I’d have to say that the auction was an interesting experience.
 
Properties from all over Kern County sold yesterday to the highest bidder.  Some buyers were there for only one property that they had in mind, and investors were there just hoping to grab a good deal, regardless of the property condition. 
 
There had to be about 700 people that attended the event and you could tell that there were more people there than expected because they had to bring out more chairs.  My investor picked up one property, but had about 15 of them on his list.  I think there was a lot of people that attended the event thinking they were going to pick up a property for $1000.  There are too many infomercials these days about how to “Make Millions in Real Estate” which provides a misconception to the industry.
 
Some of the things I noticed was that after each property received it’s final bid, groups of two and three would stand up and slowly walk out of the building.  This is a huge mistake.  Just because that auction was over, doesn’t mean the property is automatically in contract.  Matter of fact, after about 10 properties with winning bids, about three would come back on the block.  The property has to be “Under Contract” or they will put it back on.
 
I met a guy that bought his very first investment, cash, at this auction.  He asked a lot of questions, and was worried because he never even walked in the home.  I assured him that his $95,000 bid price ($99,750 sales price with the 5% buyer premium), was a really good deal, even if the property needed $30k in repairs.  The lot alone had to be worth at least $50k. 
 
My investor lost about 5 or 6 different properties to a higher bidder, with a difference of $5000 on each.  When you attend these auctions, you have to know and be comfortable with your cap.  If not, you could very easily get into emotional bidding and you might as well go to Vegas because if you’re going to waste money, at least get free cocktails doing it.
 
That’s my take.
 
Jon Vaughn
Realtor, RE/MAX Magic

Thanks to Jon for letting me post his e-mail message here. Anyone else go to the auction? Thoughts?

-Vanessa Gregory, staff writer