Todd Talbot Auctioning His Arizona Home For One Penny (VIDEO)

Bids for Todd Talbot's home in Glendale, Arizona, start at one penny.

A dollar can't get you much these days, but a penny is apparently enough to put down a bid on a home.

That's right, a foreclosed home in Glendale, Arizona, appraised in 2010 as being worth $127,300 is now being sold in an online auction -- with bids starting at a penny.

Each bid rises by a penny, and as of Tuesday morning the highest bid for the home was $2.42. Though there are already penny auctions for electronic and other consumer goods, this appears to be the first penny auction for a house, according to ABC News.

All that said, bidders do have to pay 60 cents every time they make a bid, which is how Todd Talbot, the owner of the home, is making money on the auction, according to ABC 15, a local ABC affiliate.

The penny auction is just one extreme consequence of a foreclosure crisis weighing on home values everywhere. Foreclosures accounted for about one-quarter of all home sales at the end of 2011, according to RealtyTrac. Today, roughly one in five homeowners are underwater on their mortgages, according to CoreLogic.

Partly as a result of the foreclosure crisis, the nation's housing prices have yet to bottom out. The S&P/Case-Shiller Home Price Indices fell in December for the eighth consecutive month to a low not seen since early 2003.

The foreclosure crisis has hit particularly hard in Arizona -- the site of the penny auction -- where the housing boom and bust were deeper than in many other states. Thirty-eight percent of all home sales at the end of 2011 were foreclosure-related, according to RealtyTrac, and 48 percent of all Arizona homeowners with mortgages are underwater on their mortgages, according to CoreLogic.

Talbot said he bought the house he's now auctioning for $81,000 in a foreclosure sale in January, according to ABC News. He spent another $20,000 on renovating the house. He doesn't expect to sell the home for less than $2,750.

The 1,749-square-foot home has four bedrooms, two bathrooms, a fireplace, and a garage. The auction ends on Tuesday evening.

Comments

[ab2101]

12:39 PM on 03/14/2012

Well it didn't sell. The reserve price was not met. The final bid was for $38.04 and the bidder bid 661 times. So he says he will list it again in the future and try to figure out a way to make his money and get the reserve met.

[Beernuts]

12:09 PM on 03/14/2012

Aaahhhh....Glendale AZ....paradise.....if you love feral cat colonies, "low maintenance" (dirt)landscaping, abandoned shopping centers and exotically-named trailer ghettos. I'd say $.75 ought to just about reflect actual value. I used to read of dystopia, thinking it was all an interesting fantasy. Aaahhhh....Glendale AZ!!!

[anneeger]

01:31 PM on 03/14/2012

Yeah, I loved to read these dystopian novels and now I am living it.

[tumorimmunologist]

11:09 AM on 03/14/2012

Anyone who claims that Clinton or Barney are to blame need to wake up. The programs that they started were successful and well regulated. Home ownership increased, defaults did not. Then Bush jumped on board with his "Ownership Society", deregulated banks and pushed them to give out more and more mortgages. Bush created the “zero-down-payment initiative” and allowed for more “exotic” Mortgage option. Bush’s deregulation spawned the “no documentation required other than the say-so of the borrower, loans.” He pushed the Banks to make more loans and they giddily obliged. These are well-documented facts that Faux News will not tell you. Don’t forget google is your friend…look it up “OWNERSHIP SOCIETY”!

[honkndodge]

11:04 AM on 03/14/2012

What a scam. If he owns the house outright and was to get what he wants, after buying the house in January for $81,000.00 and sticking in another 20K and paying 30% to the auctioneers he'd walk away with an approximate profit of $14,500.00 in a month and a half. Not bad.

[honkndodge]

10:48 AM on 03/14/2012

WOW, at the last bid of $2.42 = 242 bids x .60 a bid = the whopping money making price of $145.20 so far. He's gonna need a lot more bids on the house then this to come out ahead.

[Milrepa]

09:58 AM on 03/14/2012

The owner of the house already has a lot of juice if he managed to "advertise" his auction on an international site like Huffington Post.
This house looks like bad luck at any price, the address adds up to 13.

[Payo Pow]

09:24 AM on 03/14/2012

Why ppl call it a scam? he just taking advantage of our Capital System...one men's grieve is another man's treasure.

[hmkiowa]

09:18 AM on 03/14/2012

1,749-square-foot home has four bedrooms, two bathrooms, a fireplace. Tiny, tiny, tiny. Not worth bidding on even you wanted to live in AZ.

[mikely48]

08:33 AM on 03/14/2012

How interesting, and what an education from all the comments I read and the research reading the info on the sites/links in the Huff article!
-Agencies like the PAMA (Penny Auction Merchants Association) that certify a site/auction is legit.
-Auto bidders (the site even suggests using one).
-That there are risks for the bidder, owner, and auction site. Who's is greatest?
-This property didn't get enough bids to meet the $2,750 reserve so it didn't sell.
-Bidders that bought a package on the site can get a refund, less a fee from PayPal, or keep their credits for next time.
-The owner now has to continue paying the mortgage, taxes, or whatever based on how he purchased; and, does he get any of the $$$ from those bids if they are refunded because it didn't sell?
-Did the site make anything? How much did it cost them to run the auction?
-The biggest risk is possibly with the bidder, after all it's an online auction and sale, no inspection of the house, or mortgage research, etc. (at least that I saw)); and, if they don’t get the house, they lose the cost of their bids. Just stick with your own limits though, it is gambling!

It goes on and on and on; but, if this particular auction is completely legit, EVERYONE can come out a winner if due diligence is used!
-The bidder gets a good deal.
-The owner makes money.
-The auction site makes money.

[James Tarver]

05:22 AM on 03/14/2012

Payneful...your math is off. You have to multiply the lower amount he is willing to accept, which is $2,750 x 100 pennies in a dollar = $275,000 x 60 cent, which is...(point) 60 NOT 60 point zero, zero to get a total of $165,000 NOT $16,500,000 OK??

[Payneful]

04:57 AM on 03/14/2012

I don't think many people are doing the math right here...Lets look at this ridiculous sham that is never going to work out with the right math:

Minimum Bid: $2,750
Each Bid: $0.01
Cost Per Bid: $0.60
National Auction Cut %: ~30%

Math Time!:
2,750x100 (100 one cent bids = $1) = 275,000 bids.
275,000x60 (each of those bids cost 60 cents) = $16,500,000

Yes, that is right...his $2,750 "minimum" reserve price would net him 16.5 million dollars.

Then Penny Auctions takes their ~30% cut:

16.5MM x 0.3 = $4,950,000 profit for Penny Auctions.

Best Scam in the world. Will never happen.

[Kim Teed-Allen]

05:22 AM on 03/14/2012

Don't you mean 275,000 x .60 (after all it is 60 cents not 60 dollars) which equals $165,000 not 16.5 million

[seniors31]

05:26 AM on 03/14/2012

275000 each bid $0.61= $167,750.00

[JazzJackson]

04:33 AM on 03/14/2012

Looks like a garage attached to a studio apartment. I'll give him $75

[heerox001]

04:08 AM on 03/14/2012

What an amazing scam!

[koshea724]

03:46 AM on 03/14/2012

it said the winner was an autobidder - many auction people put in autobids when they run an auction (just like on ebay) - so they can always outbid the others. The other bidders were single bidders - they didn't stand a chance - they should put this guy who won on the news and show his birth certificate and proper credentials - it's a scam

[gryphon10]

03:31 AM on 03/14/2012

I'll take a dozen.

[cissylynn46]

09:13 AM on 03/14/2012

Do these people realize that they could be buying this mans debt along with the house and from what I hear that is considerable. The house is being foreclosed on some one has to pay the bank. This guy is crazy like a fox he can get you to buy his Debt. Huffpost you guys should be ashamed for not telling the risk.

[ab2101]

12:47 PM on 03/14/2012

The house was already foreclosed. HE bought it for $81,000 and put $20,000 of his own money into it to fix it up. He's trying to flip it and make a profit... It is not in foreclosure now because HE bought it. HE has paid for it. Now he wants to sell it, get his invested $101,000 back and make a profit. And if it is sold at auction for his reserve price of $2,750, then whoever wins it will not likely have a mortgage payment.

[discus510]

12:56 PM on 03/14/2012

how can someone be buying his debt?? the house cant be transfer to new owner name if the buyer doesnt get a loan out for the debt. hes saying house is paid off which mean he got deed to house