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Selling a Home Via Auction Growing in Popularity October 31, 2006

Posted by AlynnROCK Group in Auction News, Real Estate News.
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The Real Estate Bloggers just posted this article on their site on October 27, 2006.  My comments on their article are posted on that page – yep, I liked it. 

It’s definitely a good read and worth the time to take a look at their site – they have lots of great articles on Real Estate Auctions like:

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 gavel-money.jpgThe Real Estate Bloggers 10/27/06

If you are looking at selling your home quickly, a growing trend in the country is using the auction system. Homes sold via auction increased by 5.9 percent in 2006 and auctions have been trending upwards over the past 5 years.

While using an auction may seem unconventional, people interested in a quick sale have used this effectively. There is an excitement that auctions bring that is done correctly can significantly increase the price of a sale, and if you use the minimum bids correctly, you will be out only the fees to the auctioneer if the home does not sell.

As the real estate market cools and homes languish longer awaiting a buyer, both residential real estate “buyers and sellers are turning to the auction method, and we foresee this trend continuing to increase,” William Sheridan, president of the Overland Park, Kan.-based trade group (NAA), said in a statement.

The number of residential real estate auctions, the industry’s fastest-growing segment, grew 4.5 percent in the third quarter. While residential real estate has the hottest hand, the three biggest segments of the auction industry are automobiles, land and agricultural real estate, and agricultural machinery and equipment.

The auction industry is expected to generate total revenue of $254.4 billion in 2006, up from $240.2 billion in 2005 {via the Chicago Tribune}.

*Thank you to TransparentRE for sending me the link to this article!*

Home Auctions a Risky Business October 27, 2006

Posted by AlynnROCK Group in Auction News, Real Estate News.
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Every single day my phone rings and the person on the other end of the line wants to sell their real estate. They tell me they are “motivated” and they “have to sell”. But, when I dig a little deeper, I often find that there is a number that they are stuck on; a price that they “have to get”. So, I put on my “Consultant” hat and try to objectively explain the benefits and drawbacks of selling at auction. At least twice a day I have to tell that person looking for a miracle that “I’m not Santa Claus.” I have their best interest at heart, which is why I most often end up referring these sellers to real estate agents that I know and trust who can list their property and take fantastic professional care of their situation.

I like the article below because it tells a good story (well, at least the beginning of one….we’ll have to follow up next week to find out how it ends). Shanna Hogan from Scottsdale, AZ East Valley Tribune does a very good job of outlining the pros and cons of selling property at auction for sellers.

Home Auctions a Risky Business

Bill Yakobovich’s ritzy north Scottsdale estate sat vacant for nearly five months before he decided to ditch his real estate agent and put the home up for auction.

“Nobody stepped forward to give me the greenbacks,” he said. “I said ‘I am not going to go through another winter. I am just going to sell it at auction.’ ”

Next month his 4,500-squarefoot Desert Mountain home, which was originally listed for $2.9 million, will sell regardless of price, for no minimum bid and no reserve. The house is guaranteed to sell to the highest bidder when the gavel drops.

It’s a risky move, Yakobovich admits, but it’s a chance he’s willing to take.

“I’m not using the home,” he said. “If the market tells me it’s worth less than I expected to get when I listed it a year ago, then that’s OK. It’s really worth it to me, just to get rid of it.”

Frustrated by the Valley’s lukewarm housing market, more sellers like Yakobovich are turning to home auctions.

And while the method was once viewed as a desperate attempt to unload a foreclosure or bankruptcy, it’s become a popular choice for Scottsdale homeowners to sell their lavish estates.

“More and more high-end luxury-home owners are seeing the need to go the auction route to get the appropriate marketing exposure and to pull in buyers,” said Shirley Ector, auction sales manager at Mesa-based Excelerate Auction Group.

The latest quarterly study released by the National Auctioneers Association reports residential real estate is the hottest auction commodity. Home auctions are up 4.5 percent in gross sales nationwide so far this year, compared with the same period last year, the report said.

And the majority of the Valley’s million-dollar home auctions are taking place in Scottsdale, said Bob Boone, the local designated broker for National Auction Group, a company that specializes in luxury-home auctions.

“Homes in this area attract a lot of interest and attention,” he said.

Although homes don’t always fetch what they could through a typical real estate listing, it’s a viable method for people who want to sell quickly.

“If the seller chooses to sell at no reserve or absolute auction, they know for sure it will sell,” said Carl Cunningham, an owner and auctioneer for the Phoenix-based Cunningham and Associates, an industrial and real estate auction group. “The only question is for how much?”

But a speedy sale may not always be the best thing for for someone looking to get the most money for a piece of property, said Dominic Scappaticci, president and designated broker for Scottsdalebased Equitable Real Estate.

“Some people are turning towards the auction because they are holding out for ’05 prices and aren’t obtaining them,” he said. “They’re overreacting and going to an auction company, which is probably going to get them less than if they marketed properly under the corrected price.”

North Phoenix residents Joanna Keeton and Jeremy Hawthorn recently put their home on Sweetwater Avenue and 25th Street up for auction, but instead of using an auction house, they are doing it on their own.

“Its really pretty simple,” Keeton said. “We put an ad in the paper and put fliers up around the supermarkets and colleges.”

Although homes in their areas typically sell for $210,000 to $245,000, the couple advertised their home with a starting bid of $159,500 to attract interest.

“I think people find that it’s a bit of a gamble,” Keeton said. “We thought it would be a cool idea to try just because it seemed fair to people who were looking to buy a house.”

The cost of selling a home through auction is about the same, or slightly higher, than selling through an agent. Auction houses charge 6 percent to 10 percent of the selling price. A real estate agent typically charges 6 percent.

As for Yakobovich’s home, there hasn’t been a lot of interest in the property, said William Bone, president of National Auction Group, the company conducting the auction. But Bone is hopeful the house will generate interest by the auction date.

“Its a beautiful house,” he said. “We hope it will do well.”

Benefits of selling at auction

• Speed. A home sold at auction can close within 30 days.

• Control. Setting the auction date, terms and conditions allows the seller to make plans accordingly.

• Eliminate carrying costs. An auction helps the seller eliminate mortgage payments, maintenance, taxes and insurance, which can be a burden if a property lingers on the market.

Drawbacks of selling at auction
• Price. Houses may come in at a price lower than what the seller hoped for.

• Fees. Marketing costs and fees charged by an auction house can escalate selling costs above what a traditional real estate agent would charge.

Desert Mountain home auction When: Nov. 1. Registration begins at 4 p.m., auction at 6 p.m. Where: 41777 N. 111th Place, Scottsdale Info: Bidders are required to bring $100,000 in certified funds to participate. Closing will be within 30 days. Contact: National Auction Group, (800) 650-8720. Beginning Oct. 24, call (480) 595-1291. For more information, visit
www.nationalauctiongroup.com

Sheldon Good and Prudential – Allies in Real Estate October 26, 2006

Posted by AlynnROCK Group in Auction News, Real Estate News.
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Prudential Fox & Roach Realtors  and Sheldon Good & Company  have formed an alliance.  A marriage between the best real estate auction company in the world (yeah, I wanna be just like them when I grow up) and one of the most well-known traditional listing real estate companies in the country.  What interesting timing….as the NAR reports the first decrease in existing home sales, the NAA reports the continued amazing BOOM in the real estate auction industry.  Yeah!!!

Home auctions on the rise

Prudential Fox & Roach is teaming up with Sheldon Good & Co. to offer auctions as a way to sell homes for owners, builders and real estate developers alike.

The largest real estate firm by far in the Philadelphia metropolitan market, Prudential Fox officials believe its combination with Good, the biggest U.S. auction house, is especially well-timed.

“Real estate auctions, now a $51.2 billion industry in the United States, allow sellers to increase properties’ visibility to a national audience and to close sales quickly,” said Ed Ritti, Prudential Fox vice president.

Usually, real estate auctions flourish as local housing markets cool. The last time auctions flowered was during the late 1980s and early 1990s, when home prices dropped precipitously in certain parts of the United States, southern California and Texas included.

Auctions sold about $14.2 billion in residential real estate last year, up 8.4 percent over 2004, according to the National Auctioneers Association. (That still amounts to less than 1 percent of all U.S. home sales, but the percentage is sure to grow with higher mortgage rates and threats of another recession looming on the economic horizon.)

The growth in real estate auctions ” ..is due in part to the eBay phenomenon as Americans have become more familiar with the auction process,” said Steven L. Good, chairman and chief executive of Sheldon Good & Co., based in Chicago.

Auctions can provide builders, investors and developers with the ability to buy and sell everything from single-family homes, townhouses and condos to raw and approved land, Ritti explained. Sales in once red-hot markets have tanked so quickly that sellers have little handle on how much their homes are really worth now — or how to attract buyers to begin with.

Auctions also give homeowners another, often faster way to sell their abode in a market fast losing steam.

(Existing home sales dropped 4.1 percent from June to July, a 2½-year low, the National Association of Realtors reported last week.)

For an individual homeowner, adding the auction option to more traditional ways to sell allows sellers “to control negotiations as if it were still a seller’s market,” said Ritti.

Prudential Fox first looked at the New Jersey shore real estate market because certain pockets there are languishing,Ritti said. Existing home listings in Ocean City, N.J., Wildwood, N.J., and Brigantine, N.J., for instance — markets where people tend to buy homes more for investments than to occupy them –have doubled since a year ago.

The picture is brighter in Avalon, N.J., and Stone Harbor, N.J., where buyers live in their own homes rather than renting them out, Ritti explained.

Sales of existing and new homes in the Philadelphia regional market have slowed down 20 to 30 percent in the last year, Ritti said. Chester County is no exception.

The market for raw pieces of land to be developed is somewhat stronger.

Buyers pay the auction commission, once they’ve registered for auction sales and put down deposits, usually 10 percent of the home’s estimated value.

Sellers are responsible for paying either part of, or all costs of newspaper ads, mailings and other ploys used to whet potential buyers’ appetites. These fees can run from several thousand dollars for a run-of-the-mill home to $50,000 or more for a so-called “trophy” or celebrity property — sometimes even an island or two.

First client for the new alliance is builder Tom Morello’s Sea Breeze Development, which will put 22 new vacation homes on the auction block in North Wildwood, N.J. come October.
 

Auctioneer Appointed to NAR Board October 25, 2006

Posted by AlynnROCK Group in Auction News, Real Estate News.
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I wonder how many Realtors realize that the “live Auction” of real estate has become so prevalent that the NAR appointed the president of the NAA to the NAR Board!?!! 

Here is some food for thought that came in one of my NAA letters:  “According to U.S. Harris Interactive poll in 2003, ‘FUN’ is the number one reason consumers attend live auctions.  They are looking for something original, unexpected, or exciting and 83% think auctions are an exciting way to get good deals.” 

When was the last time you witnessed or experienced an EXCITING real estate transaction?

   NAA President Renews Relationship with NAR to Spur Partnerships sold-sign-with-key.jpg

OVERLAND PARK, KS – National Auctioneers Association  (NAA) President William Sheridan, CAI, AARE, GPPA has rekindled a relationship with the National Association of Realtors  (NAR) in order to foster more business partnerships between Realtors and NAA auctioneers.

“There is room in the commission window of a real estate sale for two companies to be compensated for their efforts,” Sheridan said.  Sheridan, of Mason, Mich., was recently appointed to NAR’s Board of Directors after he contacted NAR President-Elect Pat Vredevoogd Coombs, also a resident of Michigan, to suggest the groups work together. Sheridan will attend his first board meeting Nov. 9-12 in New Orleans during NAR’s 2006 convention.

“I am going to tell their board that I want to raise awareness of both associations’ members that they should be utilizing each other,” he said. The associations communicated during the 1990s about auctions, but drifted apart in the last five years, Sheridan said. Sheridan has already spoken to NAR leaders that there are three ways that auctioneers can work with NAR’s 1.2 million members.

One way is that auctioneers can sell real estate by auction and be very successful. We are experts in the marketing and execution of auction properties. The second way is that we can sell inventory that comes to Realtors, including antiques, shop equipment or farm machinery. The third way is that auctioneers can be the fundraisers for NAR, which does a lot of fundraising, including for the Women’s Council of Realtors and other groups.”

NAR President elect Vredevoogd Coombs told NAA members during a recent speech at NAA’s 2006 International Auctioneers Conference and Show that “This (partnership) has great potential…Much of what we do is entrenched with each other. Our businesses overlap tremendously.”

Sheridan said he will emphasize to NAR officials and members the benefits of selling real estate by auction for the Realtor and client.  “I will also mention that, when they are interested in selling real estate by auction, the first things they can do are to look in the NAA membership directory to find an NAA auctioneer near them with the AARE designation,” he said, referring to the Accredited Auctioneer of Real Estate designation that indicates the auctioneer has completed auction real estate education.

More auctioneers across the country are working more frequently with Realtors and real estate agents. And, residential real estate auctions, the fastest growing sector of the auction industry, grew by 4.4 percent in the first half of 2006, up slightly from the 4.0 percent at the same mid-year point last year. Residential real estate grew at 8.4 percent overall in 2005 and has been the topic of widespread media coverage as a growing business niche.

SOURCE:  National Auctioneers Association