Elk Grove 'Hell House' Sells for $60K Over Asking Price

ELK GROVE (CBS13) - A neighborhood's nearly three-year-long nightmare involving what some described as a "house from hell" ended Thursday morning with a public auction on the driveway.

The public auction of a nuisance house in Elk Grove drew two dozen people to the front yard

Neighbors say the house at 6136 Demonte Way was a magnet for drugs, prostitution and violence and led to more than 200 police calls for service. Pressure from the neighborhood watch ultimately led to the arrest of property owner Kiran Rawat and her husband Raghvendra "Raj" Singh and the court-ordered seizure and sale of the property.

READ MORE: Elk Grove Neighborhood Celebrates 'Hell House' Auction

Two dozen people gathered on the driveway at 10 a.m. for the auction, with the opening bid set at $415,000. In its listing the Sterling Realty Group described the property as being "in very rough condition," a claim that nobody who had been inside could dispute. Regardless, interest among bidders was strong and drove the sale price up to $475,000.

"We were surprised it went as high as it did," said Brenda Koster of Sunflower Realty Group, who had actually hoped to get the house for under the asking price.

Dan Collins of the Bay Area Receivership Group, which specializes in code enforcement cases like this one, acted as auctioneer.

"This was a good outcome given the condition of the property," he said.

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Several investors participating in the auction, including Brenda Koster, said the eventual selling price was too high for anyone to make much money "flipping" the house.

"We're thinking the people (who offered $475,000) are going to do a fix-and-hold to rent or fix-and-live," she said.

And that's what appears to have happened. A man who asked not to be identified by name said he plans to make the former "hell house" his home.

"I'm happy that it's not an investor," said neighborhood watch captain Nate Champion. "As soon as he finishes his paperwork we'll welcome him to the neighborhood."

Escrow will close 61 days after a judge formally confirms the sale.

The Bay Area Receivership Group's Gerard Keena said disposition of the Demonte Way property presented a special challenge because creditors had filed nearly $3 million in liens against the property, most of it for prior court judgments and unpaid federal taxes. Keena said the IRS agreed to waive its senior priority to allow a new owner to get title insurance.