BOSTON, MA - In pursuit of their dream house, Michelle and Jerry LaFlamme left their Fairhaven home at 7:15 yesterday morning to get to the Hynes Veterans Memorial Convention Center early. There, pushing a stroller with their 2 year old son, Leo, as their daughter, Jessica, 5, clung to her mother's side, the LaFlammes registered to participate in an event that offered the only way they felt they could afford to buy a house in a down market: a massive foreclosure auction.
The LaFlammes were among 1,500 people who arrived at the convention center to bid on about 170 Massachusetts homes auctioned by Real Estate Disposition Corp., the second such event the California real estate company has held in the state since November. All morning and afternoon, bidders came in and out of the auditorium to the monotonous amplified rap of the auctioneer who called out number after number at near-inhuman speed.
The state is investigating whether some of the homes featured at the November auction were sold before the foreclosure process was complete. About a quarter of the winning bidders at the November auction have not been able to close on their homes. But this did not prevent prospective buyers from coming to yesterday's auction. Daniel Pelrine, an ironworker from Roslindale, said he was "somewhat" concerned about the complications in the previous auction.
Nonetheless, Pelrine, who owns a home but is considering investing in another piece of property, wrote down the price at which each property sold, trying to ignore the droning voice of the auctioneer. The majority of the bidders were looking for a house to live in, although some, like Pelrine, came to purchase houses they would resell or rent out, said Michael Schack, the real estate company's senior vice president. Behind each purchase lay a story of financial hardship - of owners who could not afford their homes anymore, and, in many cases, of bidders who cannot afford to buy a home any other way.
Houses previously valued at $379,000 sold for $275,000. Condos previously valued at $150,000 sold for $75,000. The LaFlammes were hoping to purchase a $378,000 two-story single family house overlooking the Cape Cod Canal for no more than $250,000. The LaFlammes, who are expecting their third baby, often get overnight visits from Jerry LaFlamme's 16-year-old twin sons. The family shares a single bathroom in a three-bedroom house.
The LaFlammes know they won't be able to find buyers for that house in a slumped market, and, with Jerry's salary from his post office job as their only source of income, they probably cannot afford to buy a house that meets their needs unless it is a foreclosure. But the story behind the foreclosure of the house they were considering was "awful," according to Michelle LaFlamme, who had looked up records on the house. According to her, the previous owner was arrested and committed suicide. "I wanted to make sure he didn't do it in the house," she said. He didn't. He did it in a jail cell.
Other bidders said they preferred not to think about the fates of the previous owners of the houses they wanted to buy. "If we get a good price it doesn't matter," said Hidy Mercado, a pregnant mother with three preteen girls who is renting a house in Lawrence with her husband, Juan. The family was hoping to pay $50,000 to $100,000 for a multifamily home in Lawrence or Methuen. "It's a strictly financial transaction," said a woman who did not want to give her name. She and her husband own a home, but were considering buying one or more houses as investments. "What happened before, I am not responsible for it. I'm not taking advantage of it."
Schack, whose company sold almost 300 foreclosed Massachusetts homes at an auction in Boston last November, took a practical view. "We're all human
Source: Boston.com