Thursday, February 22, 2007

House Auction: Marketing Gimmick or Sign of Things to Come?

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?

Full Article

Auction Website

45 comments:

lissiebeth said...

They should have gotten, David [The Shill] Lereah out there to auction off those houses.He really knows how to spill a line of beans.
He probably count make more money doing that than pumping BS

zippo said...

My answer to the question, at the risk of sounding like a waffling politician, is both.

A marketing gimmick to "grease the wheels" and generate some interest on some dead-in-the-water properties. These are the homes that are most likely to remain unsold when the auction is over.

- AND -

Definitely a sign of market desparation. When the pyschology becomes "any sale at any price" because the owner can't tolerate another day of carrying costs, then you know the tide is turning.

jayz said...

I friggin' LOVE the story about the failed flipper at the beginning of the article.

First rule of business - there are times when you are going to LOSE money.

Next rule of business - if you are an amateur, the probability of losing money is automatically quintupled.

What a dickweed.

lissiebeth said...

I had quintuples with my fifth husband, Dick. Talk about a loser!! He didn't know the business of anything.We sold the kids into indentured service just to pay the mortgage. Fortuntely Dick is no longer with us, we buried him in the back yard, and now weeds are going on his grave.
How prophetic!

lizziebeth said...

Crazy,

How'd you know??????? Well except his name wasn't Dick it was Harry and he was my fourth husband(what kind of girl do you think I am?). I had twins with Harry. The Quints were with my second husband. You are psychic and prophetic! Wow! I always thought junk food killed brain cells! Guess those Cheetos work miracles!

lissiebeth said...

I apologize, I forgot to take my hormone replacement therapy medicine, Premarin. I tend to bite peoples heads off, like what happened to my last husband, while we were having oral sex. OUCH!!
Ennuch, my current husband is in dire need of a larger implant, and I was wondering if somebody could recommend a good uroligist..
Signed; Desperate Lizzy

Really Desperate Lissie said...

Does anybody know if David Lereah is married??I think he's kinda cute, and has nice approach to things. He's always so positive, unlike so many of the men I've had already. They always want the same old thing. Chettos and Budweiser.
I'd like a real man that drinks Cosmos. Then we could get down and dirty!!!

Anonymous said...

Is anyone planning on following the auction (via the internet)?

I'll try to, but have relatives in town this weekend.

SKB said...

I may watch the action for a bit. The last one I ended up wasting the entire day glued to the computer.

I am sure the end result will be more like the same. People giving their offers and sellers rejecting them.

SKB

lizziebeth said...

SKB rely

I didn't realize that Harry had our bedroom scences, over the internet. Did you get a chance to see any of them. I hear they were the rage.
A few of them were just more of the same, and yes, I rejected offers to appear doing untold things. I mean what's a girl to do???

lizziebeth said...

Crazy,

Don't use my name! It's one thing if you change it up a bit, but now you're just pissing me off! If you're going to pretend to be me, the least you can do is use correct spelling!!!! You know Crazy, I figured you had to be some sort of loser, guess I'm right. I must have struck a nerve.

lizziebeth said...

A little irrate are we....having dual personalities. When one P.O's the other.I knew you had me figured out from the beginning, and I'm just trying to prove you, that you were right!!! And NOW you get mad at me...LIZZIE, LIZZIE, what are we to do???

lizziebeth said...

You must forgive me, because things are just getting out of hand with me. All I do now, is sit in front of the TV all day, watching "Gray's Anatomy" episodes,that I have loaded on my Tivo.
Just trying to figure out were I went wrong.I mean, I sent my resumes out to all the hospitals, etc, and the only offer I got was for a bed pan attendent at a nursing home.I've applied to all the doctors in the telephone book, and nothing..
It seems the harder I try, the more bee-hind I get. Maybe, it was the photo app I sent out with my husbands picure on it.

The real Lizziebeth said...

Crazy,

You are digging in the wrong direction. Happily married to a successful business man($300k+ salary)for 18 years! Don't need a job, but choose to continue working part time. It is your sad life that makes you so vicious!

To All:
Even those of us with money have been hurt by the housing bubble! Moving back to Florida we expected to be able to purchase our dream home while being back home where we grew up surrounded by family. We relocated all over the country and worked extremely hard to get to this point in our lives. On our income a $750-$800k home is about the right price. We were shocked at what we could get for that price and were certain that most folks that had homes in that price range were way over extended! We earned our money the hard way! Our family had to make many sacrifices. No way were we willing to risk our hard earned money. We will sit back and watch this mess unfold from our lovely rental home.

the real lizzie alter ego said...

I really know, deep down, that if I was as well off as I want everybody to think, I'd just shut my damn mouth, and not show my anger. I used to think $300K a year was a lot of money, but now you can't even buy a Masarati Diablo for that....What's a girl to do?

lizziebeth said...

Now Crazy, are we getting a little testy??????? Jealous are we???? No need for Masarati's here. I live a modest lifestyle. Ever read the millionaire next door??? Hey cheetos were on sale at publix.

Queen lissiebeth II said...

Ahh Yes!! The part time job, we have to have, at Wal-Mart, being a greeter, so we can see smiling faces, in friendly places. It's wonderful forcing yourself to smile, living the modest life style.Knowing your imaginary millions are just that!!!

lizziebeth said...

You're getting warmer. I do need to have a smiling face in my line of work. However, it requires a bit more education. Keep digging. Still going in the wrong direction! Well, if you think the Banks are going to belly up, then maybe you're right, my money is imaginary.

tin lizziebeth said...

If you work for WAMU or BOA you gotta a problem sister lizzy.
Holders/sellers of ARMs are going to eat it BIGTIME...

Geilt said...

Did i miss something? =P Lizzie and Lizzie who ? omg im confused.

Anonymous said...

The only confused person is Crazy Geezer who keeps posting using other people’s names.

He used to post here a lot (meaning an obsessed amount). He was the only poster, posting rants over and over again. His feelings got hurt because the owner of the board would never respond to what he had to say. All he ever really did was copy and paste what other people had written.
He decided to quit posting here to our delight but unfortunately it didn't last long, he then resorted to the annoying and disrespectful habit of stealing identities.

Geilt said...

I thought his posts were great. I always looked forward to reading them!

Oh well. was sad when i saw he stopped posting.

lizziebeth said...

If you read other housing bubble blogs, business periodicals... you would get the same information just in a much better format. Some of his comments were funny, however, he carried it way too far. He was annoying to most. He has wreaked havoc according to his own account at other blog sites. They feel the same way over at the housing bubble blog about him. They have hundreds of posters and now most just ignore what he has to say. He uses several different names as well as posing as me. He tried to make me look as stupid as he is, nobody fell for it over there. I for one, am happy not to have to scroll down past his posts. As much of what he has to post, I've already read somewhere else. I will quit responding to his idotic comments.

Anonymous said...

What I like about him, was that he seamed to be non-partial. He didn't respect anybody. I think that is most admiralable, as most postings, such as the one I just read, are a bunch of jibberish

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