Home buyers find bargains at auction of lender-owned homes

Lest you think that all foreclosed homes are boarded-up, abandoned and barely salvageable, take a peek at what sold Saturday at an auction of 121 lender-owned homes held at the Marriott City Center hotel in downtown Minneapolis:

A seven-bedroom, six bath, 5,340-square-foot house on Bell Oaks Estates Road in Eden Prairie, previously valued at $1,721,000, sold -- the first time -- for $735,000. When that sale fell through and the house came 'round to the auctioneer's block a second time, it went for $690,000.

A historic home in Center City, Minn., built in 1897, with 40 acres of land, was previously valued at $700,000. It ultimately sold for $220,000.

A two-bedroom, two-bath condo in Edina with a previous value of $169,000 went for $65,000. Another condo in Woodbury, with 2,400 square feet, sold for $100,000. It had a previous value of $315,000.

Jessica Anderson, 22, of Little Falls, Minn., picked up a "beautiful" two-story, three-bedroom, two-bath townhouse in St. Joseph, Minn., for $78,000 cash. It was previously valued at $220,000, she said. The townhouse has a fireplace, a sunroom and a two-car garage, she said.

Anderson said she's excited to move into her first home -- after it undergoes some renovation. Many of the homes for sale Saturday were "cash only." Usually that meant they needed work, thus didn't qualify for lender financing.

Anderson came to the auction with her dad, Bruce Anderson, and her Realtor, Amy Levin. She'd seen the townhouse and signed a purchase agreement for it before, but by then the owner had contracted with the Real Estate Disposition Corp., which auctioned off the properties Saturday.

"Come on, we sell automobiles for more than these houses," Gelman quipped at one point. And from Ratliff: "Your cable bill is going to be higher than your mortgage!"

That quote was prompted by the sale of a two-bedroom, one-bath house at 1126 Sherburne Av. in St. Paul for $32,500. It had a previous value of $205,000.

There were a whole lot of bargains, and a few that went for too much, at least according to Mike Nehmzow, a Realtor/broker who owns Get You Moved Realty in Andover. He and his wife, Tammy, picked up a duplex in Pine City, Minn., for $5,000 cash. Yep, $5,000. The couple plans to fix it up and rent it out. They own eight houses and two vacant lots.

When a home at 624 Robert St. S. in St. Paul sold for $72,500, Nehmzow said, "That's ridiculous. It's selling for double what it should." The house was, though, previously valued at $198,000.

There also were a few properties that could only be called, well, dumps.

Pete and Melissa Bauer of Nerstrand, Minn., knew what they were getting into as they waited to fill out the paperwork on a $15,000 house.

The house, in Brownsville, Minn., sits on a bluff with a beautiful view of the Mississippi River, Pete Bauer said. It was knocked off its foundation by a mudslide after the 2007 floods in southeastern Minnesota.

The house "might be fixable," said Pete, who owns Nerstrand Excavating. If not, they'll tear it down and use the land, which is worth $35,000, he said.

Lise Day bought a small house at 1827 Ivy Av. E. in St. Paul as an investment. At last year's auction, she bought and fixed up a house in South St. Paul. That one sold in June after less than 30 days on the market. She hasn't seen the inside of the house on Ivy, but hopes to do the same with it.

"It's a surprise, an adventure," she said.