Real Estate Auction Blog

ibidcondo.com online auction results - Star Riverside Austin TX

Linda Mardi (AuctionFirst) — Tue, 26 May 2009 20:54:04 -0500

Tonight witnessed the inaugural auction of newly launched ibidcondo.com - an online real estate auction company. Star Riverside unit #104 sold tonight for $86,840 by online real estate auction. The list price was $690,000. There was NO reserve. Bidders had to pay a $100 seat fee to participate. The seat fee covers the sellers cost of the property. The bulk of the auction proceeds is donated to a charity of Buyer's choosing.

I bought a seat and bid in the auction. It lasted 25 minutes. The first 5 minutes took forever for the price to get higher because the bid increment was only $10. After 5 minutes, the bid increment increased to $100. And in the final 10 minutes, the bid increment was $1,000. I lost out by $2,000. The buyer has 48 hours to sign the sales contract and pay cash.

The company has posted its upcoming auctions for other units in the same complex - to be built early 2010. This is a tremendous opportunity/deal - even a "steal" I'd add.

Linda Mardi
AuctionFirst.com

What I learned about auction buyers in todays market

Linda Mardi (AuctionFirst) — Sun, 24 May 2009 07:25:58 -0500

Sellers Pay Attention:

Most people think that auction buyers are all investors, but that's not true. Seventy percent (70%) of the residential real estate that we sell at auction are bought by end users. Even in today's market, we see the end users buying at auction.

HOWEVER, the property always stands on its own at the end of the day. Real estate auctioneers specialize in accelerated marketing, have a big budget to work with, and target likely buyer pools. It's not unusual for an auction marketing plan to require 200 - 300 hours over 4 to 6 week period to execute the plan! Lots of work.

OK - that's all background information for this next part:

In today's Austin real estate market, buyers want ready-to-move-into upgraded/blinged out homes. It is easier to find an end user buyer for a really great home than it is to find for a fixer-upper. Buyers are willing to pay more if the home has more features, upgrades, bling, etc.

Case in point:

I recently auctioned a 5,000 sf executive home in an upscale neighborhood that sits on an awesome part of an award-winning golf course. We spent 4 weeks marketing the property aggressively. Many real estate agents work this subdivision. The market has slowed significantly, however there are still sales going on. Rate reductions - a bit. What I really saw during this marketing period is that buyers weren't looking for a "deal" as much as they are looking for their dream home with all of the bells and whistles. They are going to carry only one mortgage, live in one home - so they want that home to have everything ready to go. No fixing up.

I recently had lunch with a broker friend who works the SO-CO area. He confirmed that his nicer/prettier listings are selling much faster than his fixer-uppers or ugly properties.

If you are selling your home, this is good and bad news. Because the question is - how much $ do you put into getting your home ready to sell? I've always advised clients of a 2x1 rules. Spend only when you know that you'll get $2 back for every $1 you put in. But in today's market, you may need to spend that $1 in order to sell the property even if that means your $1 gets 50 cents. The fact is, that those improvement in today's market are your ticket to entry to sell. Make wise choices, consult or hire an expert to advise you on what needs to be done, stay away from too much personal taste, go with decisions that have more general and broad appeal.

Linda Mardi
AuctionFirst.com - Accelerated marketing of real estate thru auction.

Austin Auction Results - Brazos Place Condo Auction May 17 2009

Linda Mardi (AuctionFirst) — Sun, 17 May 2009 20:28:25 -0500

I attended today's auction of 19 Brazos Condos in Austin TX. Real estate auction company Kennedy Wilson today auctioned 19 units in under 2 hours. Although all of the units had very low starting bids, the auctioneer explained at the begining of the auction that the units had unpublished reserves and that to win the bid, the highest bid had to meet or exceed the unpublished reserves.

The auction was extremely well attended, with over 200 packed into the Hilton downtown hotel ballroom. It appeared that many of the bidders had pre-registered with the company - streamlining their entrance into the ballroom. Only registered bidders were allowed inside.

The auction itself was well paced. The auctioneer did a great job of explaining how the bidding would work and how he would gradually lower the increments, from $25,000 down to not less than $1,000. The bid assistants also did a great job of maintaining lively interest and tracking the various bidders with loud "yeps" as someone bid a higher increment.

As the bidding proceeded, the auctioneer would announce when the unpublished reserve had been met and that the unit would then be sold to the highest bidder, no longer subject to seller's confirmation. All but one unit was announced sold. There was only one unit that did not meet the reserve and was sold subject to seller's confirmation.

This was a great auction to watch! However, as a real estate auctioneer myself, I can tell you that the critical and most important aspect of the auction is the marketing program. This auction was well marketed - read about it, heard about everywhere - plus it gots tons of tv news and media exposure. Additionally, the auction company and builder were able to maintain a sales office open 7 days a week with models available to walk thru. This auction had great participation for several reasons: (1) well marketed; (2) great product; and (3) minimum bids, even though meaningless, help grab attention; and (4) extremely well executed auction logistics/strategy.

What a great way to buy! Terms and conditions were transparent, the only thing the buyer needed to do was figure out how much he/she wanted to pay maximum, figure out their financing, and then get a $2500 certified check per property they wanted to buy. A 4% buyers premium will be added to each high bid to total the sales price. Buyers have 30 days to close escrow. Final sales prices were between 20-40% less than the last sales price.

What a great way to sell! Auctions present an ideal opportunity for builders, especially condo builders who have financing considerations tied to the number of unsold units remaining.

I've traveled the country attending real estate auctions from some of the best auction companies. This was my first Kennedy-Wilson auction - a California based company that holds real estate auctions across the country. I was impressed with Wilson-Kennedy's auction logistics today. Their auction team and staff appeared top notch and experienced. The auctioneer did a fabulous job! So often, I'm embarrassed by what I find to be old-school auctioneers that engage in non-appreciated humor or just a bit too much 'country' inappropriate for more upscale / commercial property auctions. Registration flowed smoothly, thanks in large part to pre-registration packets available, and the contract signing room also appeared to run smoothly, with Heritage Title assisting with contracts.

Linda Mardi, Auctioneer/Broker/Attorney
www.AuctionFirst.com
Specializing in accelerated marketing of real estate sales thru auction. Sell your property in 30 days - ask us how.

Real Estate Auction - Austin's first monthly residential property auction

Linda Mardi (AuctionFirst) — Sat, 09 Feb 2008 06:13:02 -0600

A new company launched this month in Austin Texas - Home Auction Live. Home Auction Live is a primarily residential real esate aution marketing company that has announced it will hold monthly real estate auctions in Austin Texas serving property owners who want an expedient way to sell while retaining the highest possible sales price.

The first auction is scheduled for Saturday March 1st at the Hyatt Regency in Austin TX. Registration starts at 9am; and the auction at 10a Remote and online bidding will be available thru NAA Live. Don's miss this exciting first auction launch.

www.HomeAuctionLive.com

Linda Mardi
AuctionFirst.com

Real Estate Auction - Video Announcement

Linda Mardi (AuctionFirst) — Sat, 14 Jun 2008 06:23:13 -0500

Auction - Austin TX 22 Acres overlooking Marble Falls, June 26

Linda Mardi (AuctionFirst) — Sat, 14 Jun 2008 05:35:05 -0500

Real Estate Auction - Absolute, No Minimum, Live - 6.65+/- Acres Austin TX

Linda Mardi (AuctionFirst) — Mon, 22 Oct 2007 07:03:40 -0500

ABSOLUTE AUCTION: No Reserve/No Minimum - 6.65 Acres

0 Nuckols Crossing at St Elmos Rd E
List Price: Auction
MLS # 1296640

ABSOLUTE AUCTION: No Reserve/No Minimum - 6.65 Acres

Area SE Live Auction November 2nd - No Minimum, No Reserve. Apx 6.65 undeveloped acres just 2 miles SE of downtown Austin (Del Valle); off I-35 and Hwy 71. Heavily wooded/creek. Live auction will be held offsite on Friday Nov 2nd at Noon. Guaranteed free & clear title. Visit www.AuctionFirst.com to download bid package. 10% Buyer Premium. Broker participation welcome.

http://www.auctionfirst.com/property.asp

Linda Mardi, REALTOR®
AuctionFirst
12407 N Mopac Expwy
Austin, TX 78758
512-247-1350

lindam@auctionfirst.com
www.AuctionFirst.com

Austin's first monthly real estate auction - March 1st

Linda Mardi (AuctionFirst) — Tue, 26 Feb 2008 08:17:35 -0600

March 1, 2008 Auction Listings
Hyatt Town Lake, 208 Barton Springs

Bid Online or In Person

Call (512) 444-7799 for details or visit HomeAuctionLive.com

Click here for full Auction details • Click any property for more details

8411 BARGAMIN DR. AUSTIN, TX 78736
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Perfect fixer upper opportunity! Needs some cosmetic updating, but has amazing potential.
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Category: Resale •  Area: W • Open: Feb 24 2-3p
Sq Ft: 1469 •  BR/Bath: 4/2 •  YrBuilt: 1984
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Starting Bid : $1 •  Previous Value : $160,000

110 PALOMA POINT, GEORGETOWN, TX 78628
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This property is move in ready with many upgrades, and sits on the 18th teebox of the Jack Nicklaus signature golf course.
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Category: Luxury New Construction • Area: GTW
Open: Feb 24 12-2p
Sq Ft: 6000 • BR/Bath:4/5 • YrBuilt: 2005
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Sponsored by: Joseph Aubin
Starting Bid : $1,400,000 • Previous Value : $1,950,000

12511 LAMPLIGHT VILLAGE AVE, AUSTIN, TX 78727
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Perfect for first-time homebuyer. Completely remodeled house in the heart of North Austin. Just minutes from the Domain, IBM. New hardwoods, countertops, carpet, appliances, Huge bonus room.
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Category: Resale •  Area: N •  Open: Feb 24 1:30-2:30p
Sq Ft: 1678 •  BR/Bath: 3/2 •  YrBuilt: 1976
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Sponsored by: Janice Johnson
Starting Bid : $99,000 •  Previous Value : $139,000

181 KAATZ LANE HUTTO, TX 78634
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Incredible commercial/industrial/residential development opportunity in one of Texas fastest growing area. Property is in an ideal locaiton just off SH130 (CR685) 1/2 mile North of Gattis School. Commercial development in Pflugerville and Hutto areas is astounding. 2500 SF home is tear-down/gut-restore.
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Category: Land •  Area: Hutto • Open: Feb 24 12-4p
Sq Ft: n/a •  BR/Bath: n/a •  YrBuilt: 1985

Sponsored by: Linda Mardi -
Starting Bid : $499,000 •  Previous Value : $762,000

3815 GUADALUPE, UNIT 303, AUSTIN, TX 78751
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Beautifully Renovated Central Austin Condominium! This entirely updated complex features a tranquil courtyard and grilling area. HOA dues are less than $175.00 per month. Central location with close proximity to the UT campus.
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Category: Condo •  Area: 4 • Open: Feb 24 12-1p
Sq Ft: 618 •  BR/Bath: 1/1 •  YrBuilt: 1969
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Sponsored by: Angelique Naylor
Starting Bid : $99,000 •  Previous Value : $140,000

17545 REED PARK ROAD, UNIT 3, LAGO VISTA, TX 78645
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New construction 3/2. The Villas at Harbor Drive are 10 upscale villas with expansive views of Lake Travis from all three floors. Villas are conveniently located on Reed Parks Road next to Northlake Hills. Unit 3 has beautiful hill country and lake views. Luxury high end finish out. Complex comes with a cabana, tram, and waterfalls. 2x stack W/D. A 35 slip marina awaits your boat below the villas.
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Category: Condo •  Area: Lago Vista • Open: Feb 24 1-2p
Sq Ft: 2000 •  BR/Bath: 3/2 •  YrBuilt: 2007
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Starting Bid : $399,000 •  Previous Value : $520,000

3307 NORWOOD HILL RD., AUSTIN, TX 78723
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Large corner lot home with mature trees and close proximity to downtown and the Paul Morris Golf Course. This home features an open design with laminate flooring, and an updated HVAC and water heater.
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Category: Resale •  Area: 3 • Open: Feb 24 1:30-2:30p
Sq Ft: 1908 •  BR/Bath: 3/2 •  YrBuilt: 1965
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Sponsored by: Roland Castillo, Keller Williams
Starting Bid : $135,000 •  Previous Value : $180,000

423 SUNFISH STREET, LAKEWAY, TX 78734
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Beautiful Golf Course property! Beautiful deck view. Landscaping & ponds. Soaring two story ceiling and a wall of windows! Private golf course lot. Pool plan available.
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Category: Resale •  Area: Lakeway • Open: Feb 24 2-3p
Sq Ft: 2172 •  BR/Bath: 3/3 •  YrBuilt: 1972
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Sponsored by: Claire McIntyre
Starting Bid : $199,000 •  Previous Value : $259,900

3709 ARLINGTON COVE, LAGO VISTA, TX, 78645
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Brand new construction complete with appliance package and hydro-seeded lawn with sprinkler system. Enjoy nearby golf course, lake access and hill country views!
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Category: New •  Area: LN • Open: Feb 24 12-1p
Sq Ft: 1500 •  BR/Bath: 3/2 •  YrBuilt: 2008
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Sponsored by: Tony Durant
Starting Bid : $144,000 •  Previous Value : $169,500

21019 NIMITZ, LAGO VISTA, TX, 78645
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Santa Fe series, new construction home with unique architectural features. Courtyard entry, porte-cochere, flex room, granite countertops, custom cabinetr, stainless steel appliances, landscaping and sprinkler system.
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Category: New •  Area: LN • Open: Feb 24 1:30-2:30p
Sq Ft: 2200 •  BR/Bath: 3/2 •  YrBuilt: 2008
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Sponsored by: Tony Durant
Starting Bid : $199,900 •  Previous Value : $284,900

4203 HILLSIDE, LAGO VISTA, TX 78645
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Serrano Villa Grande Series new construction home with many upgrades. Side entry garage, wired for surround sound in living room and patio, granite kitchen, mother-in-law setup.
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Category: New •  Area: LN • Open: Feb 24 3-4p
Sq Ft: 2000 •  BR/Bath: 3/3 •  YrBuilt: 2007
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Sponsored by: Tony Durant
Starting Bid : $220,000 •  Previous Value : $259,900

2701 AMERICAN DRIVE, LAGO VISTA, TX 78645
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Gorgeous Split level design, abundant views and deer await you! This spec home is a MUST See! Wood accents and details throughout, make a client very happy with this home.
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Category: New •  Area: LN • Open: Feb 24 2-3p
Sq Ft: 2200 •  BR/Bath: 3/2 •  YrBuilt: 2007
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Sponsored by: Luis Barrera
Starting Bid : $199,000 •  Previous Value : $265,500

2606 ORSOBELLO COVE, CEDAR PARK, TX 78613
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Beautiful two-story home in desirable Bella Vista! 5 beds including a MIL - bedroom and full bath on main level w/ private patio and entrance! Loft gameroom uptairs, huge kitchen, full office too!
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Category: Resale •  Area: Cedar Park • Open: Feb 24 12-1p
Sq Ft: 3245 •  BR/Bath: 5/3 •  YrBuilt: 2002
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Starting Bid : $219,000 •  Previous Value : $329,000

711 GRAHAM PLACE AUSTIN, TX 78705
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Duplex. Each unit has 2 BR/1 BA. Needs significant renovation, priced for lot value. Should rent for $3,000/mo+ when fixed up. Could be operational with about $60k worth of work.
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Category: Investment Resale •  Area: UT
Open: Feb 24 2-3p
Sq Ft: 1560 •  BR/Bath: 2/1 •  YrBuilt: 1925
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Starting Bid : $299,000 •  Previous Value : $369,900

18849 HIDDEN RIDGE PLACE, JONESTOWN, TX 78645
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Enjoy lakeside living with a side of lone star luxury. Waterfront luxury home development opportunity - 1.1 Acres in the Hollows, a unique Texas Hill Country gem.
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Category: Lot •  Area: Lago Vista
Sq Ft: n/a •  BR/Bath: n/a •  YrBuilt: n/a
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Sponsored by: Roland Castillo, Keller Williams
Starting Bid : $90,000 •  Previous Value : $200,000

18825 HIDDEN RIDGE PLACE, JONESTOWN, TX 78645
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Enjoy lakeside living with a side of lone star luxury. Waterfront luxury home development opportunity - 2.45 Acres in the Hollows, a unique Texas Hill Country gem.
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Category: Lot •  Area: Lago Vista
Sq Ft: n/a •  BR/Bath: n/a •  YrBuilt: n/a
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Sponsored by: Roland Castillo, Keller Williams
Starting Bid : $250,000 •  Previous Value : $459,000

Realtors Use Creative Ways To Sell Homes

Linda Mardi (AuctionFirst) — Sun, 02 Mar 2008 20:16:29 -0600

AUSTIN TEXAS -

Great media coverage in what was Home Auction Live!'s inaugural auction for Austin Texas. The below link is to coverage from Austin TV news KXAN who brought their news crew to cover the auction. In all, over 16 properties were offered for sale at the auction, about 120 in attendance. 10 of the properties were referred by local realtors who either referred the properties or co-brokered wtih Home Auction Live. Also is a link to Friday's pre-auction coverage by Olga Campos of KVUE.

http://www.kxan.com/Global/story.asp?S=7951131
http://www.kvue.com/news/local/stories/022808kvuehomeauctions-cb.7ba35be.html

Linda Mardi, AuctionFirst

Fake Auctions?

Linda Mardi (AuctionFirst) — Sun, 03 Feb 2008 21:12:18 -0600

Do you consider reserve auctions to be "fake" auctions? I read a blog today and the author commented that he though reserve auctions were fake auctions to him; not really an auction if there's a reserve.

A common dictionary defintion for "Auction" is the sale of property to the highest bidder. A common industry defintion for a real estate auction is the firm sale of real property by competitive bidding. In my experience, 80% of reserve auctions sell to the highest bidder, even if under the reserve because the seller was willing to take the high bid.

What is your opinion and why? Do you think reserve auctions are good or bad? Are you as likely to bid on a property that has a reserve as you are for a property with no reserve?

Linda
www.AuctionFirst.com

Home Auction Live! Unites Motivated Sellers and Eager Buyers

Linda Mardi (AuctionFirst) — Sun, 10 Feb 2008 12:56:29 -0600

Austin Top Producer Launches Monthly Real Estate Auction
Home Auction Live! Unites Motivated Sellers and Eager Buyers

February 8, 2008 (Austin, TX) - Central Texans now have a fresh, new way to buy and sell real estate. With Home Auction Live!, Austin's new real estate business, property owners can sell their homes quickly and at a fair-market price because buyers compete for the purchase on price alone.

Beginning on March 1^st, Home Auction Live! will hold their monthly real estate auctions. Buyers will be able to choose from single family homes, newly constructed homes, condos, commercial properties and development lots and acreage. Sellers will enjoy having their properties marketed to a large pool of willing buyers, resulting in quicker-than-usual home sales. Additionally, Home Auction Live is real estate agent-friendly.

Launched by Robert Grunnah of Castle Hill Properties, Home Auction Live! connects motivated sellers and eager buyers to buy and sell real estate in a fair, fast, and transparent way-assuring everyone gets a fair deal. Grunnah explains, "Sellers can look forward to accelerated and aggressive marketing of their home, fair market value offers, and a quick closing. Buyers will be able to choose from a wide inventory of homes, in every price range, with motivated sellers. Everybody wins!"

Robert Grunnah is a leader in the Austin, Texas real estate scene. According to Austin Business Journal, he was ranked as Austin's #3 top producer for 2006, with $50M+ in average annual sales. Grunnah created Home Auction Live! in response to a real need he saw in the area. "Auctions aren't just for run-down properties anymore...home auctions are perfect for even pristine homes with sellers who would like to sell their homes quickly for a fair price...where time is money and they don't have time or money to waste," he explained. In fact, the National Association of Realtors projects that 35% of all real estate sold in the U.S. over the next several years will be done so through auctions instead of conventional real estate marketing.

Home Auction Live! can bring a market value offer in as little as thirty days by investing heavily in marketing properties to gather up prospective buyers and holding monthly auctions. Home Auctions Live! allows the open market to determine the fair selling price of homes.

Home Auction Live! is currently accepting consignments into its first auction, taking place on March 1^st,2008, at the Hyatt Regency Hotel on Town Lake in Austin. A limited number of property slots are available on a first come, first served basis. For more information, contact Robert Grunnah at Robert@homeauctionlive.com

What can $1 dollar get you?

Linda Mardi (AuctionFirst) — Mon, 04 Feb 2008 21:18:21 -0600

I had an ebay auction last year - sold about 9 designer outfits in one lot. High bidder was $1. Best auction she ever won - her comments, not mine. But I'd have to agree.

What about real estate?

When I talk with sellers about reserves and their needing to set a very very low or no reserve. A common comment is "but what if no one bids more than $1?"

What would your response be if this was to be a no reserve auction? (I'll tell you my comments in part 2).

Linda
AuctionFirst.com
Real Estate Auctioneer

Top Austin Agent launches Auction company

Linda Mardi (AuctionFirst) — Sun, 03 Feb 2008 06:39:36 -0600

Hi All,

Newsflash! Robert Grunnah of Castle Hill Investments in Austin TX has launched a real estate auction company Home Auction Live! - you can find it at www.HomeAuctionLive.com.

Robert is Austin's #3 top producer for 2006, according to Austin Business Journal, with over $50M in annual sales. Looking for a way to diversify his existing brokerage that focuses on rental properties and investors, Robert decided that real estate auctions are here to stay and gaining appeal by sellers as an alternative way to market and sell their properties.

Home Auction Live launched February 1st and its first auction is scheduled for March 1, 2008 at the Hyatt Regency in Town Lake, Austin TX. The company expects to have 20+ properties up for sale that include mostly single family residences, but also some lots, multifamily, and commercial opportunities. All sellers have been pre-qualified as highly motivated and confidential reserves are super low. Buyers need to do their homework ahead of the auction - but have a great chance to get a wonderful deal.

The auction will be quite an event. Plus, the company is planning on regular monthly auctions on the first saturday of each month.

Linda Mardi, President/Auctioneer/Broker/Attorney
AuctionFirst.com

AuctionFirst specializes in selling real estate by accelerate auction marketing.

Our Toughest AUCTION of 2007

Linda Mardi (AuctionFirst) — Thu, 10 Jan 2008 02:04:47 -0600

Our Toughest Auction of 2007

It promised to be a huge break - our first auction of a high-end property in Chapel Hill, North Carolina. Best yet, the property was in a prominent location within walking distance to UNC and there was no way to miss our conspicuous 3x4 foot auctions signs. The sellers were well known, going through an equitable divorce and two months behind on mortgage payments.

The real challenge however, had to do with events that occurred two years prior in 2005. That's when an inflated appraisal set the property's value at a cool one million dollars. The sellers, elated at the huge increase in value over the short time they owned the property, took out and spent a large equity line of credit. In less than a year they put the property back on the market, pricing it under the appraised value in order to initiate a quick sale. Over the next 18 months the MLS list price continued to drop as there were few showings and no offers.

At the time it was referred to our auction company AuctionFirst by the listing agent, the MLS list price was at $875,000. We accepted the auction project knowing that it would end up involving a short sale with the seller's lender. The terms and conditions were carefully written to reflect this complex situation.

The accelerated marketing budget of $8,000, paid upfront by the seller, was robust enough to attract both local and national interest. Special events including buyer seminars were held in conjunction with two open houses. Local companies partnered on these events and provided food, landscaping, minor home improvements and staging in return for being mentioned in the direct marketing campaign and news releases. Over 120 people toured the property during the open house events, four times the number of prospective buyers who toured the home during the previous 18 months it had been marketed conventionally. There was a lot of media interest which resulted in several interviews with local newspapers.

Auction day at the end of July was picture perfect and a crowd including many local real estate agents came to watch the action. The largest newspaper in the region, The Raleigh News & Observer, sent a reporter, photographer and videographer to capture the event. Potential auction clients all showed up to witness a real auction event prior to making their own decisions to sell by auction.

Bidders? Yes, they showed up too. But none came with the deposit required to register. One bidder raced to the bank but never returned. We started the auction on time, initiated a brief mock auction to help loosen everyone up and went through the auction terms and conditions. Then it was time to make the disappointing announcement: no bidders were prepared according to the auction terms and conditions so we could not start up the bidding; also that the auction would immediately be turned into a sealed bid auction with bids due into our office within 10 days. Altogether the live auction event was an embarrassment. Quick thinking saved it from being perceived as a complete train wreck.
Ten days later we received four bids into our office, each accompanied by the required deposit. It seemed that everyone was finally ready to play by the rules! According to the new auction terms and conditions, only the top three bidders could continue to compete and increase their bids. The lowest bid dropped out and that left three bidders, each represented by a local agent and each indicating they wanted to increase their bid. The competitive bidding phase continued via phone for another three hours and brought an additional $80,000. The final high bidder, determined at 8 pm that evening, was a Hong Kong resident represented by a local agent who had a limited power of attorney to sign the purchase agreement.

The auction results were subject to confirmation by the seller's lender. Writing and compiling the short sale package and going through the approval process with the lender's loss mitigation team proved to take over two months. The biggest challenge during this phase was keeping the buyer on board - their funds were tied up but there was no guarantee of a successful purchase. Unfortunately, the timing of the auction and short sale process coincided with the early stages of the sub-prime mortgage industry meltdown. This was followed by more bad news when USA Today wrote a front page article on how Chapel Hill values had dropped by double digits. Then came massive layoffs at the lending institution, further delaying the bank's decision.

One of the most difficult complications was the fact that the equity line was with the same lender as the first mortgage, but handled by a completely different unit. So we were attempting to work with two separate loss mitigation departments with one facing a $300,000 loss.

The lender in question had a corporate policy in place that required they work within a 90% ratio for short sale approval. This meant that the sale price we achieved needed to be within 90% of the fair market value of the property. The buyer's lender required two independent appraisals prior to closing which averaged out at $644,000. Our total sale price achieved at auction was $632,500 - within the required ratio. A closing date was set and the official lender documentation arrived via fax. That's when the final surprise arrived - a substantial reduction to our commission. The lender made it clear that this was a make or break deal - there would be no further negotiation.

Later that night, on the eve of closing, a representative for the buyer called saying they wanted out of the deal. After a two month wait they now had buyer remorse since the most recent appraisals indicated a much lower than expected property value. This picture changed once it was understood that a lawsuit would inevitably result for specific performance since the seller was a practicing attorney and the contract was iron-clad. The closing went forward the next day as scheduled and we collected a well-earned commission.

This successful auction created a lot of positive local attention. Our client felt we pulled off a minor miracle and invited us to speak to a group of colleagues which has resulted in a lot of new auction prospects. Local listing agents are calling to get educated about the Auction Option. An auction property we signed shortly after this project was successfully auctioned using the same hybrid auction technique and just closed recently for $810,000.

Would we do it again? Absolutely! It was a terrific learning curve that taught us one of the most important lessons of the year - how important it is to manage the public perception of our industry. When the onsite event failed in front of the media and such a large group of eager spectators, many could have left with the impression that "auctions don't work". That public perception had to be overcome immediately in order for our business to survive and thrive. The consequences forced to think out of the box and create a hybrid auction that is now a valuable and tested tool for high-end single family homes that works well in our marketplace.

In a buyer's market, at least in our market area, onsite auctions for high-end properties bring more spectators than bidders. In fact, for the most expensive properties, there is a very limited pool of buyers - two if we're lucky. It's very hard to bridge the gap between only two bidders in a live onsite auction format. We've found that, at least for the time being, a sealed bid format with competitive component for the top three bidders works well, allows us to get most money possible, and helps us manage public perception on high-profile projects.

Linda Mardi and Sarah Sonke
www.AuctionFirst.com
AuctionFirst specializes in selling real estate by accelerated marketing auction events.

Want to learn more about real estate auctions? Check out www.edzing.com for upcoming classes and seminars in your area.

Debt Forgiveness Act

Linda Mardi (AuctionFirst) — Mon, 31 Dec 2007 12:48:45 -0600

The mortgage debt relief act was recently signed into law by President Bush. Basically, this act relieves the debt forgiven by a bank in a home short sale between 2007-2009, from being taxed as income. Here's a link to more information on the Act.

http://www.whitehouse.gov/news/releases/2007/12/20071220-6.html#

If your or your clients property is in danger of being foreclosed, consider a real estate auction for its time effectiveness of being able to find ready/willing buyers that will compete on the price alone - bringing a maximum cash value price on auction day.

Linda Mardi
AuctionFirst.com