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Selling a home through public auction
has been on the rise for the last decade, going from a
method used in distress situations such as a foreclosure to
being as accepted as selling a toaster on eBay.
And part of what's driven the recent growth is the slowing
real estate market. Houses are staying on the market longer
and anxious sellers are using auctions to unload a property.
Buyers come to auctions with checks in hand, and sellers
don't have to worry about contingencies such as a home
inspection. Sellers even avoid commission fees, which are
only paid by buyers.
And now real estate brokers are starting to get in on the
auction action, changing what once was a tense relationship
between brokers and residential auctioneers.
Fox Residential, a year-old auction house based in Owings
Mills, struck up a deal with Long & Foster in Baltimore last
year to sell homes brought in by agents. Fox would then
share some of the 6 percent commission charged to the home
buyer with the Long & Foster agent. The partnership was
tested in the Baltimore metropolitan area, and because of
its success it's being expanded to other Maryland regions.
"Gradually we're changing the mindset of real estate
agents," said Bill Fox, owner of Fox Residential, which
sells 60 percent of the homes it puts up in auction.
"Because of the advent of eBay, people have accepted
auctions as the way to buy and sell stuff."
Long & Foster said it was interested in the partnership with
Fox because more clients were asking about selling their
homes through an auction.
Agents also were starting to turn to auctions if a property
was sitting on the market too long. But it was time
consuming to go out and look for a residential auctioneer,
said Jay Weitzel, branch manager and auction director of
Long & Foster in Towson.
"We don't see it taking over traditional listings, but it
has certainly become more of an option for sellers," Weitzel
said.
The local brokerage partnered with Fox on about a dozen
sales last year, and Weitzel said the momentum is already
growing this year to sell more. The brokerage will gradually
expand the partnership to more of its offices as the auction
method becomes more popular.
The National Auctioneers Association says the
fastest-growing segment of auctions is real estate sales,
with more than $16 billion worth of homes being sold in
2006, up from the $14.9 billion sold the previous year.
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