In the hallway of the Kitsap County Courthouse sits a table of
croissant sandwiches, cookies and bottled water. People — some
dressed for success, some quite casual — mill about chatting, as if
at a party. Cell phones chime and chirp. An infant, sitting on the
floor at his mother’s feet, twirls a tube of “Butt Paste” scavenged
from his diaper bag.
It’s Friday, auction day for properties in foreclosure, a scene
repeated weekly. With the recession, the inventory has soared. It’s
been a boon for Kevin Day of the Vestus Foreclosure Group, a
Silverdale Company that helps ready properties for auction. Vestus
works in partnership with The Legacy Group, also of Silverdale,
which provides interim financing to clients. Day and Shaun Guerrero
of Legacy coach prospective buyers through the process and often
bid in proxy for them.
Chelle Anderson of Seattle is one such client. She, her husband
Luke and four kids, ages 8 years to 9 months, live in an 800-square
-foot rental. They’ve been following a short sale in Kitsap County
for about 6 months now. Financially speaking, buying a foreclosed
property is their only hope of home ownership, and Vestus “is our
only option even with an auction.”
The property, which Anderson heard of through her mother, a Gig
Harbor resident, could come up for auction today. How does she
feel?
“Nervous,” said Anderson, even though she won’t do the actual
bidding. “My heart’s beating. I feel like I’m going to have a
baby.”
The facilitator’s services are 3 percent of the purchase price,
plus closing costs, which includes a blanket insurance policy.
Guerrero has encountered not so mysterious cases of concrete dumped
in toilets.
Standing at one end of the hallway, a woman reads legal babble
from a sheet of paper. Nobody pays any attention to her. She is
“crying the sale” as it’s known. After some minutes she finally
concludes her notification of the exact legal description of the
property, the minimum bid and other details of the offer. No
takers. “Going once, going twice.” The woman has done her duty. She
folds up the the paper and leaves, unwilling to give her name to
the press.
Another crier launches into her litany about a 2,500-square-foot
split level in South Kitsap (not Anderson’s target). Day and others
hover near the crier but generally disregard her until she opens
the bidding. It’s Day versus Julie Powers, an Olalla resident and
licensed real estate broker whose primary job for 15 years has been
flipping houses.
The bidding starts at just more than $200,000 for the home,
valued at about $350,000. Powers and Day, who’ve done this dance
before, lob offers back and forth, along with the banter of
friendly foes.
“Just get to your number, so I can beat it by a dollar,” Day
says, as the bidding approaches $260,000. “You realize this is way
out of your realm.”
Powers is a fierce and seasoned competitor, but Day takes the
property with a bid of $267,000. “It’s OK,” says Powers. “There’s
others.”
The supply of foreclosures and short-sells has yet to show signs
of dwindling, since the onset of the Great Recession. It’s been a
heyday for folks like Powers, Day and Guerrero. It’s also drawn
plenty of newbies.
“There’s a lot of naive folks, and a lot of folks who just come
to learn,” Powers said.
She usually juggles two houses at a time; she’s done three, but
it makes her crazy. She hires out the often-extensive renovation
work to subcontractors, or buyers will offer sweat equity. It’s a
highly speculative venture. Properties can have undisclosed liens.
Buyers take them “as is.” Powers, got burned early in her career,
but now is wiser.
“I’ve been doing it long enough that now it’s more of a
calculated risk,” she said. “I like it, the risk, actually. It’s
high risk, but that’s what keeps it fun.”
Byron Harris of Silverdale is another speculator who looks like
he’s having fun. Harris in a white Hawaiian shirt is a partner in
B.H.D. Holdings LLC of Silverdale, which deals in properties in
Kitsap, Whatcom and Skagit counties, as well as Southern
California. He got into the business a couple years ago, he said
“trying to make lemonade out of lemons. They’re all lemons. We just
try to squeeze ‘em.”
Harris clearly enjoys schmoozing with his fellow speculators.
“It’s just like one big dysfunctional family,” he said.
What kind of personality does it take to survive a business with
so many potential land mines? “A foolish gambler,” Harris says,
with a joker’s glint in his eye.
No, he doesn’t gamble. But he is heading to Las Vegas that
afternoon for a half-marathon.
Any advice for would be speculators? “Stay away!” Harris says.
And the raucous foreclosure fraternity cracks up.
Anderson’s house does come up for auction. It is held by two
banks, and one bank essentially buys the other out, shouldering
other bidders aside.
“I heard the news and just started crying, because I thought
we’d lost the house,” Anderson said.
She leanred, however, that this is a common practice and doesn’t
mean the price for the house will soar beyond her reach. Vestus
will approach the bank with an offer and try to get it for the
family before it goes on the market.
“We’ll see what happens,” Anderson says. “I’m still holding out
hope.”
Note to readers: This is just a quick snapshot of auction day.
It’s not meant to disregard the experience of those who have lost
their homes to foreclosure.
Chris Henry, reporter
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