The Land That Wasn’t: Why Due Diligence Matters at Auction
Every so often a story comes along that’s funny, a little sad, and a perfect lesson in why due diligence isn’t optional. This is one of them.
A seller called me, thrilled with a recent purchase. She had bought a piece of “land” in San Francisco at auction — paying $400 for the parcel, plus about $4,000 in legal fees. Given the location near China Basin, she was sure she’d struck gold. After all, in San Francisco, land almost always carries a hefty price tag.
The detail she hadn’t mentioned: her “land” was underwater. Literally. The parcel was zoned for heavy industrial use and sat beneath the waters of China Basin. There was nothing to build on, nothing to sell, and no gold to be found — just a hard, four-thousand-dollar lesson.
What due diligence would have caught
- Zoning: “Heavy industrial” tells you immediately what you can — and can’t — do with a parcel.
- The physical reality: A quick check of the parcel map and location would have revealed it was submerged.
- Title and access: Does the land have legal access? Easements? Liens that survive the sale?
- Buildability: Soil, utilities, and permits determine whether a lot is actually developable — or just a line on a map.
Why auctions amplify the risk
Auctions move fast and often sell properties “as-is,” with little disclosure. A low price is not the same as a good deal. The cheaper and more unusual the offering, the more important it is to verify exactly what you’re buying before you raise your hand — not after the gavel falls.
The takeaway
If you — or someone you know — are eyeing a “great deal,” let’s make sure it really is one before money changes hands. A short conversation up front can save thousands on the back end.
Thinking about an unusual property or an auction buy? Run it by me first — (415) 407-5324 or PrimaveraRealty.com. — Beatrice Kopilenko, REALTOR® · DRE #01970797