When I was a teen, I was pretty frugal.  I babysat, saved where I could, and eventually invested $60 in the stock market.  Ten years later, I had doubled my stock market investment and took the $120 to buy airplane tickets for New York.   I had a great time with my college friends at the convention we attended and remembered the long hours of babysitting that got me to that point.

However, my frugal living and investing acumen are nothing compared to the Ohio teenager who bought a house from her saved 4-H winnings.  She showed hogs for years and each time she won cash, she tucked it away for the future.  According to the Columbus Dispatch, she paid cash for the 4 bedroom home,

By the time she graduated from Greenfield McClain High School last June, she had saved more than $40,000 for college.

But her parents had a proposition: They’d pay for college if she’d live at home and commute to Ohio University’s Chillicothe campus.

The idea appealed to Lindsay’s thrifty, practical side but left her wondering how to invest the money she’d saved.

Her dad, who runs Binegar Auction Service, had a suggestion.

“I said, ‘You should buy a house,’ ” Gary Binegar said.

It’s pretty nifty to be that thrifty!

Photo from Columbus Dispatch.

The rain never came on Saturday, but there were snow flurries and bone-chilling temperatures.  We had a great crowd, but few buyers.  In the end, there were only two bidders and one stopped early.  As a result, the house sold for far less than it should have.

And that’s just how real estate auctions are.  Sometimes in a bidding war the sellers get far more than expected.  Other times when people aren’t enthusiastic, the auctioneer’s calls go unanswered and we have a low sales price.

For the record, the house that should have gone for $60,000 sold for $42,000.

I found an auctioneer for a property sale in the morning.  The house was built in the late 1800’s and is located in the historical district of town.  It hasn’t changed owners since the 1960’s.  When the last owner bought it, he had come home from the war and bought the house for his bride.  There they lived until both passed away this past year within six months of each other.

The house needs a lot of work, so that coupled with the fact that we’re expecting rain all day had me worried.  When our auctioneer walked into my office earlier I asked if the rain would be bad for our auction.  He said, “The best sales come in bad weather!”

O.o

Apparently, rainy day auctions are often the best because buyers come in droves because they don’t think anyone else will show up.  I hope our auctioneer is right.   I’m crossing my fingers and hoping for rain Saturday … at least until the auction ends.

I proposed at work a couple of years ago that as a fundraiser, we contact a bank or mortgage company to donate a foreclosed property that we would then auction or raffle to raise money to pay for a holiday program for our local needy children.  I suggested that so the bank wouldn’t lose everything, we put a reserve on the property and the bank would get their reserve amount. Anything in excess would go to the charity work.

Unfortunately, I was never able to rally adequate support to make the auction happen, but when I read about the sometimes success, sometimes failure of other house “giveaways” via raffles, it reminded me of the almost effort we made.  The raffles are a great way to raise money for a good charity when they work.

Home raffles, once a novelty, seem to have proliferated around the country in recent years. In California, for example, at least eight charitable groups held raffles for existing or to-be-built homes in 2009, with varying degrees of success, according to local media reports.

For example, an arts group in San Francisco netted just over $1 million after covering its raffle expenses. But ticket sales fell short for a raffle conducted by a group that fights poverty in San Jose, and the charity just broke even. Yet another group announced that it has postponed its raffle and plans to reschedule, but it promises on its Web site that it will refund ticket costs if requested.

More problems can arise when the tax man cometh. To operate a charity fundraiser like this, you’d definitely need the support of a strong management company to oversee that everything is being done correctly.  I still think it’s a great idea.  I’d love to win a house using a raffle, but the idea of an auction could also potentially be a real winner for charities, for the banks, and for any real estate company sponsoring this type of event.  Plus someone would get a new home at an auction price!

When do you know your house might be a good candidate for an auction?  Historically, the perception exists that auctions are mostly used for estate sales - to settle with the heirs.  This really is a great time for an auction, but there are also other times one should be considered.

1. If there is plenty of equity in a home.
2. If a bank agrees in advance to a short sale of a home and you know the minimum price. NOTE this is rare and you’d have to have a VERY GOOD relationship with the mortgage guarantor to make this happen.
3. Someone doesn’t want to make repairs - auction homes are sold as-is.
4. No budget for updating to get it in parade condition.  Caveat - buyers will take this into consideration and you’ll probably get a lower price.
5. Don’t want a home or land to languish on the market for a year - you need to sell it quickly.
6. You don’t want the hassle of people parading through your house with little notice. With an auction, a home is sometimes open for an advance preview - the time is predetermined and limited.  Otherwise, the house is open about two hours prior to the start-time of the auction.
7. Most importantly - we’re back to Number One.  In all cases unless it’s court-ordered, there needs to be plenty of equity for a homeowner to consider an auction.

Go to an auction sometime and experience the thrill and excitement.  If you think you might buy, be prepared to put a non-refundable 20 percent deposit down that day.