When moving property, auctions get a second look

by Ed Duggan

03/10/06

As residential market sales dip and inventory builds, some property owners are calling in the auction cavalry, hoping for a faster way to sell.

Third-generation auctioneer Louis Fisher III just turned some sour lemons into lemonade frappé for the Florida west coast city of Northport, located southeast of Venice.

The city had nearly 2,000 lots it wanted to sell and it turned to Fisher Auction Co. to sell them.

"Six years ago, these lots probably would have brought $1,000 to $2,000 each," Fisher said. "But that was before the real estate boom of the last five years."

Fisher planned to conduct half the auction online at retail, with the balance sold at live auctions, in investor bundles of five, 10 or 20 lots at a time.

"We were blown away," he said. "We sold them all online in three retail sessions: Jan. 19-26; Jan. 30-Feb. 6 and Feb. 10-20.

Even though the auction house encouraged people to make their bids early, most waited until the last minute - and crashed the system at one point.

"We extended the auction for three hours after we got it back up and running," Fisher said. "We think it was a hub problem with our service provider."

There is a fourth online auction planned for March 23-28 to sell the remaining 223 lots that were initially held back because the Florida Fish & Wildlife Conservation Commission thought they might be habitat for the scrub jay.

So far, the auction has grossed the city $60.8 million, Fisher said.

"We brought in 25 percent more than the minimum published bids, with an average price of $34,000, had 270,000 hits to the Web site, 688 cooperating brokers, and had buyers from 32 states and one foreign country," he said.

Fisher Auction spent $250,000 in a variety of advertising venues, from The Wall Street Journal to several online services and nearly 1 million opt-in e-mails.

"We already have proposals out to other municipalities and see this as a major new niche for us," Fisher said.

An auction by another name
Chappy Adams, president of Illustrated Properties in Palm Beach Gardens, said during the past several years, they were actually holding a modified form of auction.

"Many properties would have multiple offers from multiple buyers and, thus, we were holding an auction without calling it an auction," he said.

Illustrated Properties also has been offering a true auction service for the past three years, managed by Marilou MacKenzie. She is seeing a huge increase in interest in auctions since resale inventory has tripled in the last six months.

About 40 percent of properties scheduled for auction sell out prior to the auction, MacKenzie added.

Those that sell at auction, she said, bring 87 percent to 107 percent of their appraisal or listing price.

Craig King, president and CEO of Alabama-based J.P. King Auction Co., sees his company's niche as selling upscale country properties.

He has an auction scheduled on March 18 at Sundance Trails Ranch in Okeechobee, a residential equestrian park of estate-size lots ranging from five to 18 acres. There will be 25 lots on offer, 12 of them without reserve.

"The auction, when well done, is a powerful marketing tool," King said. "In good times or bad, people love a bargain."

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