When I bought my house seven years ago, I was looking for a place with a yard so I could get my hands dirty, enough rooms to roam around in and a separate laundry space in the basement.
I got it all, but now I wonder if I have too much. A shaded front yard that is finally yielding flowers, two floors too many – but a lovely renovated basement.
Now, I’m contemplating living small rather than large. I’d love to eventually move into a condo on the 25th floor of a high-rise that would give me an unblocked view of the city. I’ve seen photos of the view I have in mind, but I’m not sure if I’m ready to go there yet.
One thing I have done, though, is kept watch on the rise of condo auctions in my city of Philadelphia and across the country. As the real estate market went bust, developers who overbuilt or overconverted condos have been forced to unload them at reduced prices over the past few years. It’s happening in New York, Los Angeles, Chicago, Atlanta, Eugene, OR; Wilmington, DE, and Savannah, GA.
Intrigued by a local auction in Philadeiphia, I signed up to check out the units and hopefully, attend the auction. It is being conducted by a company called Accelerated Marketing Partners (which appeared to be the company of choice for most of these). I’d never gone to a condo auction before and I wanted to see how different it was from my regular auctions.
Last week, I dragged two friends along to inspect the condos. The minimum bids ranged from $185,000 (down from around $324,000) to $415,000 (down from $679,900). One mortgage consultant we met on site estimated that the prices were $100,000 less than others in the area.
I went looking for a view. Why have a condo on the 14th or 18thfloor if you can’t stand at your window and marvel at the beauty of it all? There wasn’t much beauty from the units we saw. The initial buyers apparently had already snapped up the best: the long expanse of Benjamin Franklin Parkway to the Philadelphia Museum of Art. (The photo above is a view of the Parkway, shot from the museum steps by photographer elPadawan.)
The best view left was of City Hall and the fountain of Love Park (photo above), but since the windows were not floor to ceiling, you’d have to use a high chair to enjoy it. Those condos were a minimum $275,000. (One of the two $400,000 views was the back of an office building.) There was another view between two buildings. The less-expensive units had no view (except for an office building), and they were dark – you’d need a lighting consultant to brighten them.
My friends had come along for their own reasons, too. One was a serious looker. She thought that having a condo in the city might offer a good place for her stay from time to time rather than making the trip to her suburban home. The upgraded furnished condos did have a luxury hotel feel to them.
The other friend wondered about buying a unit as investment property and turning it over. Another mortgage consultant we met suggested that they’d make a good investment for a medical intern living in the city for a short time but not for turnover. In turnover cases, she noted, you buy cheap, fix up and sell high. These are already fixed up and priced high.
The building had parking (the owners were offering a discount), yoga room, conference room, club lounge and fitness center. It was neat, clean. Nothing fancy, but nice and quiet in the middle of a bustling city.
After touring the building, I was looking forward to the auction. Then I got a call asking if I’d plan to bid. When I mentioned that I was not ready yet, I was told that I could not even attend the auction unless I was a serious bidder. I had to fill out a registration card and come with a $10,000 down payment. And then the person practically hung up on me. (Photo above is another view from the condo building.)
That was strange and rude. Most auctions want people to attend regardless of whether they bid or not. Just because I’m not bidding today doesn’t mean I won’t come back later (since it’s not likely that they’ll sell all of the 36 condos). That was a dumb decision. Since I can’t put you inside the auction, I did find one person’s experience of bidding for a condo.
If you plan to participate in a condo auction, it’s a good idea to do your own research. Here are some tips I found on the web. Go armed with questions and make sure you get the right answers.
Apparently, one of the questions to ask is whether the minimum bid is the final bid. This article on The Real Deal website noted that some New York City developers used the minimum bid as a starting point for negotiations. You could start with one bid and end up paying much much more.
