Auctioning homes is latest trend in real estate market

By BATTINTO BATTS, The Virginian-Pilot
? February 9, 2005

VIRGINIA BEACH ? When D.W. ?Si? Simons retired from the Navy in 1979, he was looking for a home on a tree-canopied lot with a view of the water.

He found what he was looking for in Little Neck and paid $90,000 for the home on Little Neck Point. Over the years, Simons put on a $140,000 addition and spent $20,000 or so for repairs and upgrades.

In recent years Simons watched the house?s value increase and with it his property tax bill. Simons, 76, began to wonder if the 3,500-square-foot, six-bedroom house was becoming too much for him and his wife, Louise, to manage. They decided to sell but didn?t want to pay Realtor fees or take on other costs that frequently come with transferring ownership of a piece of property.

So they turned to a Norfolk-based company, to handle the transaction. With the hot housing market, more sellers are turning to auctioneers to handle the sale because it is considered cheaper and faster.

The seller pays none of the traditional costs involved in the process, such as a home inspection or a buyer?s warranty. The buyer pays a fee to the auctioneer, which is usually between 5 and 10 percent of the sales price, and must have a 10 percent cash down payment.

A crowd of about 30 people gathered on the lawn of the Simons residence and initially bid on household items. At 1pm, Tuesday, it was time to start getting nervous.

Shortly after 1, the auctioneer began his auctioneer fast talk, starting out at $500,000. Within seconds, it was up to $750,000 and then $800,000. It looked like the bidding might go beyond $1 million, but then Zedd stopped. There was no response to his pleas.

?You all are sleeping,? the auctioneer yelled. ?Wake up. This is deep-water property. This is nothing but gold.?

Still no response. At least not vocally. Two groups of people huddled, likely discussing prospective bids and prices. At 1:10 p.m., and Simons was pacing back and forth in the yard while his wife sat inside. Simons was prepared to let the property go if a bid reached $825,000. The auctioneer resumed his pleas and finally got the number the Simonses wanted. Sold!

The buyers think they got a prime piece of real estate in this age of soaring prices. ?This piece of property is much more beautiful than people realize,? Cathy Absher said. ?Once it is cleared, it is going to be beautiful.?

After the crowd was gone, Simons took a seat in an easy chair inside his home and breathed a sigh of relief. ?The monkey?s off my back,? he said. Then the tears started to well in his eyes as he thought about all the years and effort he put into the home. ?It wears on you.?

The buyers, who had to qualify to participate in the bidding, scrambled and prepared to make a run to the bank for the necessary down payment and fees. Simons invited them back later for a celebration. ?I?ve got a bottle of champagne,? he said.

 

Live Auctions Reach $217.2 Billion in Gross Sales in 2004 By Ina Steiner January 24, 2005

The value of all goods and services sold at live auctions reached $217.2 billion in 2004, according to the National Auctioneers Association (NAA). The findings, provided through an ongoing study by global marketing research firm MORPACE International, show a sharp increase over 2003 live auction gross sales of $203.2 billion. "We're pleased that this research objectively confirms that the live auction industry is thriving, and growing at a quick pace," said NAA President Mike Jones, CAI. "It proves that the live auction method of marketing is a vigorous and effective way to meet the needs of buyers and sellers." This is broken out as gross auction sales of $202.7 billion plus professional charity auction gross sales of $14.5 billion. Real estate was the most active live-auction category in 2004. Land and Agricultural Real Estate sales showed an increase of 14.7 percent over last year. Residential Real Estate grew 14.1 percent, and Commercial Real Estate sales increased 11.1 percent. A breakout of 2004 gross sales figures by major category revealed that live-auction Automotive business was still king ($79.8 billion); followed by Land and Agricultural, Commercial and Industrial, and Residential Real Estate ($48 billion); Agricultural Machinery and Equipment ($18.4 billion); Livestock ($16.8 billion); Art, Antiques and Collectibles ($11.7 billion); Commercial and Industrial Machinery and Equipment ($11.7 billion); and Personal Property ($9.9 billion). Intellectual property and other sales accounted for the remainder of gross 2004 live auction sales.

 

Quarterly Update Reports that Auction Industry, Real Estate Sales And Auctioneers? Businesses are Outpacing Projections

OVERLAND PARK, Kansas (Oct. 29, 2004) ? Growth of the live auction business is out-pacing optimistic industry growth projections made only last summer, with real estate leading the pace.

The auction industry?s growth is being tracked through ongoing surveys conducted by global market research firm MORPACE International on behalf of the National Auctioneers Association (NAA).

• Auction Industry Growing Faster than Predicted ? Gross revenue of auction companies has increased 13.5 percent from the same time period a year ago, which is a faster rate than the 10.6 percent growth rate projected last July for 2004. If this trend continues, the live auction business in the United States should grow to approximately $215.6 billion in 2004. This is up from $189.8 billion in 2002 and $203.2 billion in 2003. (Note: These figures do not include revenue generated from charity auctions, such as the estimated $13.4 billion generated in 2003.)

• Upsurge in 2004 Real Estate Auction Sales ? In the first three quarters of 2004 compared to the same quarters last year, live-auction sales of Commercial & Industrial Real Estate (up 5.3 percent), Agricultural Real Estate (up 5.8 percent) and Residential Real Estate (up 13.3 percent) are rapidly growing. In last year?s auction industry measurement overview, real estate sales of $42 billion accounted for the second-biggest portion of live auction-marketing revenue among auction industry sales of $203.2 billion. Automobiles were the most active category last year, accounting for $79 billion in sales.

• Auctioneer Businesses Strong ? According to MORPACE, there has been a 13.5 percent increase in auction sales volume in the first three quarters of 2004, compared to the same period in 2003.

?MORPACE?s most recent update of the auction industry?s robust growth objectively confirms the success of auction businesses,? said NAA President Mike Jones, CAI. ?The research also shows that companies and consumers alike are increasingly tapping into the power and value of the auction method of marketing.?

 

December 6, 2004 - Pg 26
People Magazine

ON THE BLOCK - $41M

Donald Trump just can't get enough of Palm Beach. The billionaire developer, who already owns the famed Mar-a-Lago estate, recently purchased at auction this sprawling oceanfront property, which features a 29,000 sq/ft. mail residence, several other buildings, a pool and tennis courts.

Why are the finest of life's possessions sold at auction? Maybe it's because only auctions bring the highest and best value!

 

San Francisco Examiner

Home Auctions Pre-sell!

Rare Sales technique Sizzles in city's already hot property market.

By Kate Williamson | Staff Writer
Published on Wednesday, December 15, 2004 

An Auction company was to take bids Monday and Tuesday on two homes owned by Gordon Uhlmann, 62, president of Del Mar International, which imports Nestle chocolate bars. Both auctions were canceled because Uhlmann received pre-auction offers on the homes and chose to accept the sale!

The properties, at 830 El Camino Del Mar in The City's Sea Cliff neighborhood and one in Mendocino County, both featured exceptional ocean views. Tax records indicate that they were purchased seven years ago at roughly $3 million for the San Francisco home and $1.5 million for the Mendocino home.

Uhlmann said he bought the Mendocino home on a whim and then put millions into the property. The financial burden of the two properties grew too much for his family, he said. "We owe too much," Uhlmann said.

Uhlmann decided to auction his properties after they languished three years at asking prices of between $9.5 and $15 million.

The Auction company generally sells mansions that aren't moving. There is no minimum bid, which brings out people hoping for a deal, who then get swept up in a bidding frenzy.

Auctions have sold mansions nationally and recently sold a Palo Alto ranch to golfer Greg Norman for around $13.5 million.

In San Francisco, where buyers already get into bidding wars over and above listed prices - auction bring sales to a sizzling pace.

 

Jacksonville

Orlando firm buys Midtown Centre for $31 million

By Ryan Geddes

The Business Journal of Jacksonville

Updated: 7:00 p.m. ET Dec. 5, 2004

SOUTHSIDE -- An Orlando real estate company has bought the 31-building Midtown Centre office park, between Beach, Atlantic and University Boulevards, for $1 million dollars a building.

Kellogg Properties Inc., based in Winter Park, closed on the 31 million dollar deal Nov. 30 and hired Midtown's 11-person leasing and management staff, who were previously employed by Continental Real Estate Cos.

Kellogg bought the property from Miami Beach-based LNR Property Corp., a publicly traded real estate investment company that had bought the property from Koger Equity Inc. (now CRT Properties Inc.) for  $38.5 million dollars in 1999, according to Duval County property records.

Kellogg's first foray into the Jacksonville real estate market was with its purchase of the 900 Building in nearby Arlington in 2001 for about $3 million. The company sold that building at auction in 2003 for $4.2 million to 900 Building LLC, a company headed by Neptune Beach attorney Donald Padgett, who once worked with Koger.

Roger Kellogg, president of Kellogg Properties, said his company sold all of its real estate assets in 2003 and is re-entering the Florida real estate market with the Midtown purchase.

"We were in a liquidation mode and sort of sat on the sidelines over the last year, but now we're back in," Kellogg said. "We really liked the location and, since the building we owned before was two miles to the north, we were very familiar with Midtown Centre."

Midtown's 31 buildings were built between 1958 and 1987, making the park one of Jacksonville's oldest in addition to one of its largest.

The 42-acre, 763,000-square-foot property is home to a variety of government and private tenants but remains 37 percent vacant.

To help improve that number, Kellogg said his company will begin offering a 6 percent commission to brokers bringing new tenants to Midtown, above the typical 4 percent or 5 percent rate.

"We will also be unfolding a marketing plan over the next few months unlike anything Jacksonville has ever seen," he said.

Kellogg stopped short of saying his company's goal is to reach 100 percent occupancy at Midtown, but he said that, historically, nearly every property Kellogg has resold has been fully occupied at closing.

Glenda Snelgrove, director of leasing at Midtown, said tenants at the office park would not notice the change in ownership.

"Everything here should stay pretty much the same," she said.

Midtown Centre is home to U.S. Army and U.S. Navy recruiting offices, the Occupational Safety and Health Administration, Wackenhut Corp. and other tenants.

 

 

GREEN BAY PRESS GAZETTE

Posted Oct. 06, 2004 WPS land auction Scores Pricy Auction~ James Pecard of Green Bay makes a bid at Tuesday?s auction, which took place at the Radisson Hotel & Conference Center in Ashwaubenon. Evan Siegle/Press-Gazette Corporation?s Northwoods property commands top dollar By Mike Hoeft mhoeft@greenbaypressgazette.com Tim and Shelly Wagner of suburban Milwaukee came to Tuesday?s auction hoping to find a bargain on Peshtigo River frontage that could serve as a family getaway for generations. But what?s considered a bargain in an appreciating real estate market is all relative, as many parcels sold for hundreds of thousands of dollars. And that?s without utilities, septic systems or cabins. More than 1,200 people crowded a ballroom at the Radisson Hotel & Conference Center for the public auction of 270 acres of land owned by Wisconsin Public Service Corp. The 97 parcels are on a relatively pristine section along the Peshtigo River and High Falls Flowage in Marinette County. About a dozen bid assistants wearing navy blazers worked the crowd as auctioneer Rex Schrader solicited offers in rapid-fire syllables. The Wagners said they walked over many of the tracts and had picked out a half dozen they thought would be good for swimming and boating. ?Half of them are nice recreational lots,? Shelly Wagner said. But she feared investors bid up prices beyond the reach of middle-class families. David Ballering of Appleton said he was willing to go 70,000 for a tract, but anticipated prices would be much higher. In the first stage of the auction, the winning bidder got to choose the lot he or she wanted. That process continued until all 97 lots were bid upon. In the second stage, a person could bid on two or more tracts and compete against individual bidders. So a prospective buyer could have a second chance on a desired parcel if he or she was willing to hike the bid on two or more properties by a minimum of 10 percent. Most of the bidders were in their 40s and 50s, some looking for a second home, some looking for an investment. Jeff Kwiatkowski of Crivitz said the auction might bring good and bad changes to Northwoods communities. His family business, Kwiatkowski Construction, stands to benefit from building vacation homes and recreational structures. However, he acknowledged development could spoil the very thing that lures people there. ?It?s beautiful waters. Some people have been going there for 20 years,? he said. Supporters said development of single-family homes would boost property values, raise revenue for local governments and lower tax rates for residents. When WPS agreed to sell 6,600 acres for 25 million to the Department of Natural Resources and donate 2,853 acres to accommodate the Tommy G. Thompson Centennial State Park and adjacent Peshtigo State Forest, it held onto about 270 acres to be sold as single-family parcels. As part of a deal with the DNR, the utility still will maintain ownership of about 700 acres where four dams and 200 feet of natural shoreline are located. The Federal Energy Regulatory Commission requires the 200-foot buffer zone in public-use areas. Roger Trudeau, WPS director of real estate, said the land sale was a good deal for everyone. The sale of 270 acres ? less than 3 percent of the total WPS lands ? was necessary to offset the land donation to the state. The market value established by the auction will help WPS reach an accord with the Internal Revenue Service on tax compensation for a charitable donation and selling other lands below market value, Trudeau said. ?We think the sale benefits the public, the local economy and new seasonal homeowners,? said WPS spokesman Kerry Spees.

 

 

As the Mother City prepares for its annual intake of visitors, some Cape Town property owners are gearing up for a bumper season of sales. Some have even planned their marketing to coincide with the city?s annual influx of holidaymakers because interest from Gauteng residents in Western Cape property is at a high.

Andrew Koch of ClareMart Auction Group said: ?There is currently a lot of interest from Gauteng buyers at all levels of the property market, from the cheaper stuff to the multimillion-rand properties.? There is a perception, he said, that Cape Town property is a solid long-term investment, with opportunities in some areas to make capital gains in shorter periods.

October to April are ?hot months? in the Cape Town property market, he said, though from March to June is when sellers generally capture the most interest from foreigners. Properties going on auction in December include the Goodwood police station (which has commercial potential), a shopping centre in Athlone, a luxury home in Betty?s Bay and coastal plots dotted around the Western Cape.

Rael Levitt of Auction Alliance said interest in property is high around the end-of-the-year, but that many people looking at real estate are just doing it during the festive season for fun or out of curiosity. He said: ?Ask any estate agent and they?ll tell you there are lots of people who want to kick tyres, or just have a look.?

About four years ago, before the property boom when property was ?cheap?, people did ?sit on the beach, look around and decide to buy? ? but that was when foreigners could buy a flat in Clifton for about ?100 000, he said. Today, with the rand strength and property price rises, foreigners need the equivalent of about ?1-m to buy in Clifton, pointed out Levitt.

He agreed that March onwards was a good time to sell because there are ?lots of foreigners? in Cape Town.
Levitt, like other real estate players, said interest in the top end of Cape Town?s property market ? with price tags from R5-m - has cooled.

 

2.8 Million Dollar Mansion Smashes Price Record!

05 December 2004

By IRENE CHAPPLE

RECORD PRICE: Nick and Julia Baylis and family in the pool of their house, which has just sold for a record .77 million in Auckland's Grey Lynn suburb.
PHIL DOYLE/Sunday Star-Times

 

A Grey Lynn mansion bought 12 years ago for 4,000 has just sold for a record-breaking .77 million, establishing the once bohemian neighbourhood as one of Auckland's most exclusive suburbs. The price smashes the previous Grey Lynn record of .27m, reached last year, and leapfrogs past the record of its hip neighbour, Ponsonby, held by a .3m apartment sold last year.

But it could not tumble the area's most eye-watering sale, the 7.5m deal done on a Freemans Bay mansion in April. That had a rock-star premium attached - it was previously owned by Alannah Currie and Tom Bailey, famed for their 1980s band the Thompson Twins. Pene Milne, of Kellands Real Estate, sold the Richmond Rd record-breaker late last month and says it will bury Grey Lynn's image as Ponsonby's poor cousin.

She said Grey Lynn barely registered as a favoured spot three years ago, but had benefited from the flow-on effect of Ponsonby's popularity. The house was owned by advertising agency FCB chief executive Nick Baylis and his wife Julia, who spent around m upgrading it, including adding a 16-metre swimming pool, replacing all the inside walls, landscaping the gardens and adding an outside wood-fired pizza oven and waterfall.

The historic concrete house, built in 1894 for the wealthy candle-making Warnock family, was on the market for four weeks before it sold at auction after 30 minutes of fierce bidding. It was bought by a Westmere couple, who will use it as a family home.

The sale comes as New Zealand's property boom sinks from its peak, squeezed by successive official cash rate rises that have pushed mortgage rates to their highest levels for four years. But the slowdown could simply be a breather, with a report last week forecasting the market will gather steam late next year.

 

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Real Estate Auctions are expected to grow
to 30% of all home sales in the next 36 months.
By Ken Berzof
The Courier Journal

The Highlands Auction drew $720,000 for a house that was assessed at $248,000.
The home sold in 14 minutes! In the past year, it took an average of 72 days for a home to sell in the Louisville area, according to the Greater Louisville Association of Realtors. But on Thursday, under sunny skies and in front of more that 50 bidders and perhaps another 100 onlookers, a historic Highlands home sold in about 14 Minutes - in a spirited auction.

"It went well. It was a bit overwhelming, but I'm really pleased with the result," said Deana Law the beneficiary of a trust that sold the house at 1815 Casselberry Road off Speed Avenue. The winning bidder, Lenora Paradis, said that although she's a realtor, she likes auctions. "It's a fair way to sell a lot of property," she said. "It's quick, absolute and you don't have to renegotiate during an inspection."

Auctioning residential property is common in many countries, and in the United States,"it's definitely a growing trend; people are beginning to realize it is not a last-resort option," said Steve Lewis, the treasurer of the National Auctioneers Association. A recent study revealed that residential real estate last year generated $11.8 Billion in auction sales, which was up 12.6% from 2002 and represented 6.1% of total auction revenue.

"It's projected that in the next three to five years, a third of all real estate will be sold by auction in the United States," said Robert Shively, chief executive of the Kansas based association.

"People are becoming more comfortable about auctions because of the Internet," Lewis said. "It has increased visibility of all types of auctions." Steve Sweazy, an auctioneer and realtor said the main advantage of an auction is that, "it leaves the upper end open. There's no limit to the value when selling because of the bidding process. You can get more than what you think it's worth."

At the Highlands auction, the bidding started at $525,000 - for property assessed at $248,480. The bidding rose quickly in 25,000 increments, stalling at $700,000. The winning bid - $720,000 - was from Paradis, a realtor, who shaid she bought it on behalf of a couple of preservationists who plan to re-sell the property and prevent commercial development.