Was that the home where a snake greeted me one morning?

Ilyce Glink has a great overall take on this, but here’s what I suggest you look out for in Texas:

1. Wade through the information to find and contact the listing agent. This can be tricky, and even I have been fooled: the point of the website is to reel you into one of their agents — the point of the Dallas Morning News’ new deal with Sawbuck –so the listing agent’s name is often buried way low or in some cases. MIA. The listing agent should have direct knowledge that the listing is active and could also have lowered the sales price that very day, but not yet posted the new price.

2. Always check the tax appraisal on the home at www.dcad.org. This will take longer, but you can call to see if the taxes are paid. In Texas, the state can foreclose on your home for failure to pay property taxes.

3. Do a Google search of the addressto see if the home was once the headquarters of the Branch Davidians, or something. You can also check the history of ownership at DCAD. In Texas, sellers must reveal if a violent death has occured in a home. Death by natural causes does not need to be reported.

4. Of course you will use Google maps to get a satellite view of the street and surrounding area, but remember those maps may not be up to date even for rural properties. An owner once told me that he checked on his property down near Ennis using Google, and everything seemed to be dandy. Then he went down there to find squatters using his property to dump garbage — huge heaps that were visible from the air.

3. Always check to see if the property is subject to a Home Owner’s Associationand what dues are required, if any. If dues are required, the association will have more control over your property and hence, life.

4. Obvi you drive by the home, not just once but several times a day. The minute a rainstorm hits, you go check out that home for water leaks and drainage. Do the ground water “sniff test” of the interior. Foundation and drainage problems can be repaired, but you do want to know what you are getting into before signing on the dotted.

Anything else I did not cover?

Live auctions are a $270.7 billion dollar industry with positive growth. The fastest-growing segments are real estate – land, agricultural, commercial and industrial. And with the continued dismal news about our market, sellers and agents love the quick turnaround potential: one man’s poison could be a buyer’s bargain in five minutes – that’s how long the average auction takes. Live auction real estate revenue has grown 5.3% since 2006.  

Jean-Paul Puryear, Warren Barreto and Butler Nooner are banking on that. Their Dallas auction company, Radius Management, aims to change the way real estate is sold in Texas.

“We want to find the retail home buyer,” says Jean-Paul. “We want to make it a family auction.”

The two most common types of auctions are reserve (no minimum bid) and absolute (sold to highest bidder regardless of price). A third, more rare, is the minimum bid auction where the auctioneer only accepts bids at or above a minimum price announced at the auction and in advertisements. Most auctioneers believe that absolute auctions bring in the highest price for a property.

Radius is offering a hybrid – absolute auction subject to a reserve, sort of like how low will you go, but within reason. Prior to the auction, Radius meets with the seller and knows the absolute lowest price point he will take, which remains confidential. And if the home does not sell at the pre-determined bottom, the seller can still look at offers under the reserve.

Most auction houses – Sheldon Good, Hudson/Marshall – deal with foreclosed or erstwhile distressed properties — homes that have been abused, not loved.  Radius claims to be the first auction company in Texas to deal with “regular” homes, most brand-spanking new construction complete with home warranties. They may be pre-foreclosure or close-outs, or homes that sellers just want to move rapidly. For example, one couple: the husband is a CFO, both put money into a Lake Arlington home trying to flip it. The property has not moved, this couple no longer wants to mess with it. They contacted Radius through their web ad and literally said, take this house. And no surprise, most of the 95 homes in Sunday’s Radius auction belong to builders. While 65% of the homes to be auctioned are in the $100,000 to $300,000 range, 35% are jumbos. The highest priced home auctioned to date — $796,000.

Another new twist from Radius: people can bid on line, and the company website translates into 36 languages.

“We’ve had people calling from UAB, Canada, California and Florida all day long, “says Barreto, who says they have had an average of 250 unique visitors per day.

The auction industry standard for the real estate buyer’s premium – that is, the amount a buyer pays to cover the fees and commissions, is usually 10%, says Puryear. Radius has lowered that buyer’s premium to 7%. They are chopping realtors’ commissions, for which they expect some heat: every property has a listing broker who is paid a 2% commission for taking the listing through closing, selling it within 30 days. Buyer’s brokers are paid 1%.

The auction, they say, compels a buyer to make a decision quickly and move on it. Each home has two inspection periods prior to the auction, when potential buyers can exercise due diligence. Having buyers trolling through the home at the same time, rather than cloistered with their private agent, creates a herd-like psychological tension.

“The wives are passing each other in the kitchen and bathroom, the men are out in the garage,” says Puryear. “It’s like the heat is on, other people want this house so we’d better get serious.”

All buyers must present a letter of financing pre-qualification to obtain a bid card, and bring a certified cashier’s check for $5000 made payable to themselves. If they win the bid, they sign over the check, pay 3.5% in earnest money and begin contracting on a TREC promulgated form. My biggest concern: clear title. The guys say buyers can view the state of title prior to bidding by logging on to their website.  Additionally, the Title Company will be on site at the auction to present evidence of title to any buyer. Sellers are also required to sign a Final Bills Paid Affidavit signifying there are no outstanding liens. (I’d still contact a lawyer to be safe.)

Puryear and Barreto anticipate 300 people at Sunday’s auction, which starts at 11:00 a.m. at the Great Wolf Lodge Conference Center, 100 Great Wolf Drive in Grapevine. The properties are open for inspection Saturday, April 25 from noon to 6 pm. I’ll have a full report Monday.