Home-auctions are opportunities for both buyers and sellers

Daily Record, The (Baltimore), Sep 7, 2005 by Liz Skinner

Home auctions used to mean a fire-sale or that the seller was flat-out desperate. Today, in many cases, it represents opportunity for those on both sides of the sale.

Property auctions allow owners to sell fast and avoid months of wrangling over contingencies such as who will pay to have the fence painted or drain spout fixed. For buyers, who must be willing to take what they see, it may be a chance to own a distinctive property, albeit one that may take a bit of work.

Many Maryland properties that have some quirks with their land or layout or maintenance responsibilities are trading hands through auctions, according to auctioneers around the state.

People who are buying and selling properties through auctions are often investors looking to make a double-digit return in the hot real estate market. But there are also people selling their own homes and business owners buying and selling commercial properties, according to Paul R. Cooper of Alex Cooper Auctioneers Inc. in Towson.

The market is going at a torrid pace, said Cooper, a principal at Alex Cooper and grandson of the man who founded the company 81 years ago. During the past four months, the auctioneering firm has been selling about $20 million in properties a month.

Cooper expects the market will pick up even more as people hear details about this option for buying and selling desirable properties. People have to see that it is done successfully and through a relatively easy process, he said.

Bids not always bargains

Among the reasons people choose to sell through auctions are a quicker home sale and the cost of the deal, said Sue Stouffer, an auctioneer near Hagerstown. The whole home-selling process can take as little as a couple months through an auction. Prices vary by location and auctioneer.

At Stouffers Auction and Real Estate Co. in Smithsburg, clients are charged a 1 percent to 10 percent fee, depending on how much prep work the house needs, Stouffer said.

And she hastens to dispel the mistaken idea that all houses sold at auction are bargains.

This spring, the owners of a house northeast of Hagerstown had a Realtor tell them to list their home for $340,000 in hopes of getting $300,000. Instead, it went to auction with Stouffers and sold for $375,000.

It doesn't hurt to have more cash in your pocket, Stouffer joked.

People interested in a buying property get an information packet that includes the deed and any facts that Stouffers has been told about the house and land, she said. Interested buyers have 10 days to bring in a lead-paint specialist, inspector or anyone else to help them evaluate the house before the auction, which is usually about three weeks after the property first is advertised.

Stouffers also holds two open houses and will allow potential buyers to come in by personal appointment.

Auctioneers agree advertising each property is crucial before the auction. At Stouffers, they often target the current residences in the neighborhood and let everyone know there will be an event going on there.

Realtors often just put the property on the multiple listing services and then wait for it to sell, said Ann von Forthuber, one of the auctioneers at Auctioneers Appraisers & Estate Representatives of Towson.

Forthuber's firm uses its Web site as a marketing tool, creating an eight-minute online documentary about the property.

Alex Cooper's marketing campaigns begin with newspaper advertisements, photos on the firm's Web site and open houses, Cooper said. The company, which began auctioning properties in the 1940s, even offers electronic auctions on its Web site for less- expensive properties.

Alex Cooper doesn't reveal its fee structure, but Cooper said it's comparable to what Realtors would receive.

Cooper, who is a Realtor as well, said he doesn't feel like a competitor to traditional Realtors. It's a big pie, he concludes. None of us are going hungry.

'Get it over with'

Many people who come to Auctioneers Appraisers & Estate are people who have seen housing prices growing, and they've decided it's time to capitalize on their investment before the bubble bursts.

People want action quickly these days, with some customers coming to auctioneers after having their house on the traditional real estate market for only 60 days, von Forthuber said.

One reason the auction market has taken off is because lenders are now getting used to doing things more quickly. Everyone is starting to realize there's no sense in delaying things, Stouffer said. Let's get it over with.

In true auction form, some properties are sold as-is for whatever amount the auction results in, no matter how low or high. Some can be owner confirmation, where the auctioneer must get the owner's OK when the sale comes to the final price to make sure it's enough.

In the past five years, Stouffer has only had two properties that didn't sell at auction because the prices attracted weren't high enough, she said.

She expects to sell 50 properties this year through auction.

One customer told von Forthuber that she considers the opportunity to auction her home with Auctioneers Appraisers & Estate her silver bullet, in case the agents she has signed with can't get it sold.