Mortgagee Auctions & Mortgagee Sales (Foreclosures) in New Zealand

[Davo36]

Davo did you take out any insurance to cover you for potential tennant damage for the period between signing the contract and taking over the property?

SwissKiwi, no I didn't. Couldn't GET the insurance, that was the problem.

Also note that it was the owner in occupation, not a tenant.

I normally use a broker, but I did some ringing around myself too. No one wanted to know as soon as I said it was a mortgagee sale.

Maybe I didn't find the right insurance people but looking at it from their side would you want to insure against the likelihood of an aggrieved owner being chucked out of their property? Just too risky for most insurance companies I guess.

Perhaps more experienced people reading this can say if they've managed to get insurance covering all eventualites when buying a mortgagee property.

David

[jeremypyle]

Perhaps scam is the wrong word. But, when you consider the way New Zealanders react to perfectly good investment vehicles, it may as well be.

There is nothing new about mortgage sales or the stock market or making money buying and selling real estate.

But, New Zealanders are always looking for the quick buck. The very concept of wealth – real wealth, escapes them. New Zealanders think it’s a big house, a boat a fancy car, and an underserved sense of accomplishment.

Time and time again, while I am visiting friends and relatives in New Zealand, I end up in conversations that constantly embarrass me about real estate. Good people, who know little or next to nothing about the restate market, are actually telling me about their personal finances. This bothers me.

Once when hiking on a lonely mountain in a way-out-of-the-way part of New Zealand I run into only one guy after two days on the trail, and guess what – he starts telling me about his real estate portfolio! It would be funny if it weren’t so sad.

Monid, I want the best for New Zealanders and New Zealand --- but until the average New Zealander wakes-up and gets a clue, then I see nothing but trouble for a lot of good people.

Hi Exnzpat. What you said about real wealth is interesting. In Western culture today, people get caught up in material possessions. Undeserved adoration is given to cars, houses, boats, careers and the list goes on and on. Some of these people, so caught up in their possession, have an appearance of wealth, yet at the same time are sinking deeper and deeper into debt. The purpose of life is not about obtaining wealth.

My father has never really placed much attention on cars. One of his vehicles is a 1989 Toyota Hiace van. It has done a mileage of almost 800,000kms. He doesn’t live in an expensive house. He doesn’t even live in his own home. Yet he has a very large property portfolio. His primary motivation for getting wealthy was to help people in poor countries.

If judged by appearance of wealth, most people would assume Dad to be poor.

[jeremypyle]

Perhaps scam is the wrong word. But, when you consider the way New Zealanders react to perfectly good investment vehicles, it may as well be.

There is nothing new about mortgage sales or the stock market or making money buying and selling real estate.

But, New Zealanders are always looking for the quick buck. The very concept of wealth – real wealth, escapes them. New Zealanders think it’s a big house, a boat a fancy car, and an underserved sense of accomplishment.

Time and time again, while I am visiting friends and relatives in New Zealand, I end up in conversations that constantly embarrass me about real estate. Good people, who know little or next to nothing about the restate market, are actually telling me about their personal finances. This bothers me.

Once when hiking on a lonely mountain in a way-out-of-the-way part of New Zealand I run into only one guy after two days on the trail, and guess what – he starts telling me about his real estate portfolio! It would be funny if it weren’t so sad.

Monid, I want the best for New Zealanders and New Zealand --- but until the average New Zealander wakes-up and gets a clue, then I see nothing but trouble for a lot of good people.

Hi Jeremy,

I have just checked out your site, and it looks nice.

In the passage I have cited above, you claim that you list every mortgagee sale/auction in NZ. Your site lists 11 properties, two of which have sold. A quick search of TradeMe yields mortgagee sales that are not on your site.

Is it simply the case that your site is not fully operational yet?

Also, what financial reward do you get from the site (if any)? Are you being paid a fee for listing these properties on your site?

Paul.

I said that a website that lists every mortgagee sale in New Zealand would be extremely valuable to investors. This is my goal for the website, to be able to list every mortgagee auctions & mortgagee sale in New Zealand. As the site has only just recently opened (during the Christmas holiday break) they are not all listed yet. It is my objective to provide a site that has the market for mortgagee auctions & sales.

[Commercial Dan]

My father has never really placed much attention on cars. One of his vehicles is a 1989 Toyota Hiace van. It has done a mileage of almost 800,000kms. He doesn’t live in an expensive house. He doesn’t even live in his own home. Yet he has a very large property portfolio. His primary motivation for getting wealthy was to help people in poor countries.

If judged by appearance of wealth, most people would assume Dad to be poor.

Well said, In my first experience of going to a Bayleys Commercial Property Auction I was expecting all the glitz and glamour of Rolex watches all around and suede shoes. What a got were ordinary folks, wearing jeans and shirts that were in during the 1970s. I will never forget one man who walked in sporting a beard, which would have looked at home in the rocky mountains of the USA. He wore jeans, a tee shirt and old running shoes that must have been 10 years old. To my amazement a few agents knew him very well, in fact he ended up being the highest bidder on a property, which sold for $3.2 million.

[jeremypyle]

Can you guys stop talking about sex for just one minute?

Interesting comment from Barfoot and Thompson Auction Manager, Tim Carter, in the January "Property Investor" Magazine (p. 11)

"His "gut feeling," Cater admits, is that 2008 will see more mortgagee sales proceed...in any case, he says mortgagee auctions now fetch market price on the whole - "somtimes even better; it's not the old bargain basement situation like it used to be".

I have no doubt he is right about people paying market value or better in recent times, but I doubt that will continue long-term as bunny investors retreat and fewer buyers start looking for better deals.

I would tend to agree. At the present time, sometimes mortgagee auctions & sales do sell for market value or more (not always...bargains are still to be found). I would, however, stake my money on the fact that in a market correction or downturn in property, mortgagee auctions & sales will be below market value. During this time, buyers would be more cautious and slower to purchase. Banks and lending institutions normally want their money quickly. This would lead to mortgagee auctions selling cheaper than regular property.

[Monid]

True, but do you talk about sex with strangers or at family gatherings?

Perhaps, comparing the size of your portfolio?

Well sometimes

Actually, seriously I see no reason why not, other than Victorian prejudice that hopefully we can move past by now.

Oh I should have said, along with being a pessimist about people in general I'm also an idealist about the world and how we should act in it...

Cheers
David

[SuperDad]

Hi Jeremy,

I see - the site is a work in progress, as I thought. Yes, a site that listed all mortgagee sales would be useful.

Do you have an answer to the following question:

Also, what financial reward do you get from the site (if any)? Are you being paid a fee for listing these properties on your site?

I ask only because if you are gaining commercial benefit then this thread might be better located in the caveat emptor section.

Regards,

Paul.

[jeremypyle]

It is free for real estate agents to list mortgagee sales

It's free for real estate agents to list mortgagee auctions & sales on my website. However, there is a small charge to have a featured property. I'm new to Property Talk. Don't know that section.

[jeremypyle]

Looks can be deceiving

Well said, In my first experience of going to a Bayleys Commercial Property Auction I was expecting all the glitz and glamour of Rolex watches all around and suede shoes. What a got were ordinary folks, wearing jeans and shirts that were in during the 1970s. I will never forget one man who walked in sporting a beard, which would have looked at home in the rocky mountains of the USA. He wore jeans, a tee shirt and old running shoes that must have been 10 years old. To my amazement a few agents knew him very well, in fact he ended up being the highest bidder on a property, which sold for $3.2 million.

I spoke to a real estate agent from First National on Saturday. He told me about an investor he knows that owns over 100 houses. He said that, judging by his appearance, you would think this man is poor. He doesn't dress with an appearance of wealth.

[Hound]

Good comments here.

I think the general focus on investment does not always extend to focus on ones appearance. Ask any retail banker. And why should it? Many folk prefer to blend in or have a modest appearance. If you are secure in yourself there is no need to be showy.

[jeremypyle]

I think the general focus on investment does not always extend to focus on ones appearance. Ask any retail banker. And why should it? Many folk prefer to blend in or have a modest appearance. If you are secure in yourself there is no need to be showy.

I agree with you. Often people want to look rich in order to impress others. This is because they fear what people think of them.

[jeremypyle]

Does anyone have stories to tell of property investments?

The reason I posted this article was to receive feedback from those who have had experience in purchasing mortgagee real estate. I haven't had many stories from people yet as to investments they have made. Please give feedback someone

[Cadmium]

Well, I've decided to sit on my hands and not buy the mortgagee house I was looking at (discussed briefly above)

Its a unique house and very easy to get emotional about.

I could make money on it, but I could also loose money on it, depending on what unknown problems there may be and where the Auckland market goes.

If it turns out I can't afford to keep it, will there be another buyer around the corner to take it off my hands at a profit? Its dangerous to assume there will be.

I'm off to look at 6 month bank deposit rates.

Cadmium (who just went all bearish yet again).

[Julian]

I bought a house at a mortgagee auction one time, and when I got possession it hadn't been deliberately vandalised. Mind you I felt sorry for the owners and told them if they came up with the money (and sometimes they can but are just too late to do so) then I would transfer the house back over to them - at no profit to me. I also told them if they couldn't get the money I would give them some funds towards their rent bond if they left the place clean and tidy. They did.
Julian

[jeremypyle]

I bought a house at a mortgagee auction one time, and when I got possession it hadn't been deliberately vandalised. Mind you I felt sorry for the owners and told them if they came up with the money (and sometimes they can but are just too late to do so) then I would transfer the house back over to them - at no profit to me. I also told them if they couldn't get the money I would give them some funds towards their rent bond if they left the place clean and tidy. They did.
Julian

That is a wonderful thing to have done.