Many of you heard some rumblings in the 4th estate about the steady increase of home auctions over the past year. Now another one up in Tampa - this to be held at the Seminole Hard Rock Casino. From Shannon Behnken at the Tribune.
'TAMPA - Just as the real estate market was starting its downturn in the fall of 2005, Alan Westfall slipped into the investment game.
He paid $365,700 for a six-bedroom home in Heritage Isles, a golf course community in north Tampa. He mortgaged the property at 100 percent, painted, installed wood flooring and quickly relisted the home for $425,500.
After more than year of price reductions and unsuccessful attempts to sell or rent the house, Westfall is getting anxious. So he has decided to try his luck with an auction.
"The weight lifted off my shoulders would be tremendous if this home sells," Westfall said. "I just didn't expect the market to take a downward turn so quickly."'
And some details about the auction itself.
'Westfall is among 50 Florida property owners choosing to gamble big this Saturday at the Seminole Hard Rock Hotel & Casino in Tampa and sell their homes in the All In Mega Auction. There are single-family homes, condos and vacant land for sale. It's planned for 11 a.m. to 5 p.m. and will be broadcast online.'
As the real estate market cools further, a record 34,000 homes are listed for sale in Hillsborough and Pinellas counties. Frustrated sellers are increasingly turning for help to the auction block - once the domain of distressed or institutional sellers - and experts predict many more will follow this year. However, when the gavels fall, some may be shocked to discover what potential buyers are willing to pay. '
How much is this going to cost, and how many have reserves preset?
'Combining the properties into one auction and charging a $2,500 entry fee for each one allows for mass marketing, Bailey said. There have been TV and radio advertisements and billboards to get the word out. "It normally takes $5,000 to market a single home," he said.
Still, Bailey said, he hasn't received the number of entries he had hoped for. "I think a lot of people are waiting to see what happens with this auction. You are taking a risk, but it's your best shot."
Some sellers worry they might not get a good price, so none in Bailey's auction have opted to sell their property "absolutely" to the highest bidder, Bailey said.'
Okay. But with every house set with a reserve sales price, I'll be very curious to see how many homes actually sell. Personally, I've witnessed several houses here (in N. Tampa) go up for "auction" (with plenty of signs advertising the fact) last year, and guess what? They're still sitting empty, because the reserve price was the same as the listing price. If they truly want to close, sellers need to get real.
'While the popularity of auctions increases among private home owners, many sellers may be in for a hefty reality check.
Marty Higgenbotham of Higgenbotham Auctioneers International in Lakeland said sellers are still having a tough time in today's market.
"Sellers aren't willing to accept today's property value," he said, noting that he has seen six real estate booms and busts in his 48-year career. "They'll get over it."
Three weeks ago, Higgenbotham auctioned 115 Cape Coral and Fort Myers properties. Seven hundred buyers showed up, and nearly every property had a contract by the end of the auction. There was $24 million in contracts, Higgenbotham said, but sellers accepted just 15 bids.'
I rest my case. So, my question is: are auctions like this a marketing gimmick or (as foreclosures mount and spec-u-vestors bail out) a sign of more to come?