Putting your home on the auction block
Country music star Barbara Mandrell tried for years
to sell Fontanel, her 136-acre Nashville estate that featured an indoor
pool, shooting range and helipad. Every time a real estate agent would
call, the Mandrell home went into Normandy Invasion mode to tidy the
27,000-square-foot log home for the showing, all to no avail.
Mandrell turned her sad country song into a boot-scootin'
boogie by calling J.P. King, a fourth-generation, family-owned property
auction company in Gadsden, Ala. Within days, an auction date was
set and qualified bidders were invited to inspect the property during
a two-week showing period. When the gavel dropped, Fontanel sold
for $2.1 million, to the delight of both buyer and seller.
Mandrell's case is not unusual, especially among wealthier
homeowners. True, home auctions still more commonly evoke foreclosure
images. But owners of $1 million-plus properties are increasingly
turning to auction companies as their first choice when selling
The reason: It's fast, it's convenient and it's final.
There's no dickering on price, no contingencies, caveats or conditions.
High bidder takes all, period.
"What Barbara liked about the auction was the
viewing dates were known," says J. Craig King, president of
J.P. King. "She got her home ready one time and it was a lot
easier on her and her family.
"Upper-income people have gotten where they are
going out and making things happen as opposed to waiting on things
to happen," says King. "If they were to list a property
in this price range, it could linger on the market for a year or
more, and it's hard to create enthusiasm for a shopworn property.
More of our sellers are coming to us now as their first alternative."
Auction equals action
Property auctions are on the rise. Reaping the benefits of
the growing auction-by-owner segment are the J.P. King company,
its Gadsden-based neighbor National Auction Group, Chicago auction
house Sheldon Good & Company and other such firms across the
According to The Gwent Group, a Bloomington, Ind.,
firm that tracks the auction market, real property auctions brought
in more than $54.5 billion in 2002, a fivefold increase since 1980.
While residential auctions only account for about 2 percent of home
sales today, the National Association of Realtors estimates that
within the next seven years, one in three properties will be sold
An auction creates an event around a property, effectively
lifting it out of the local real estate market where comparable
values, financing and negotiating often make home selling a drawn
out and frustrating ordeal. For an average 8 percent to 10 percent
of the selling price (vs. a 6- to 7-percent real estate commission),
an auction company markets the property, primarily and most effectively,
through its company database of interested investors.
"At J.P. King, we have a proprietary database
of more than 250,000 people who have contacted us on past campaigns
with their buying parameters," says King. "Not only do
we target our mailings to these people, but we have our staff make
a personal call to as many as 500 or 1,000 individuals to let them
know we have a property within their criteria.
"A typical campaign will have 50 people who
will touch some aspect of that auction process, as opposed to a
typical agent who will be driving the sales process on their own."