More House Sellers Turn to Auctions to Attract Bids, Interest
Spatter, Sam, Tribune-Review/Pittsburgh Tribune-Review
More home sellers who find their unsold house on the market for months or longer, are turning to an old but previously less-used method of selling -- by auction.
Rarely used in the past, except for higher-priced properties, auctions have become more popular for homeowners, locally and nationally.
Using auctions to sell houses increased 46.6 percent from 2003 to 2007, said Chris Longley, spokesman for the National Auctioneers Association.
Home sales reached 5.3 percent of all auctions during the summer of 2007, but dipped to 2.3 percent during the first half of 2008, he said. The increase has been mostly of homes not in foreclosure, he said.
In 2007, auction companies sold about $58.5 billion in residential, commercial and industrial real estate, Longley said.
"Currently, we are averaging one auction a week on a house," said Stan Davis, president of the third-generation company Harry Davis Real Estate in Squirrel Hill. His company is doing twice as many auctions this year as it did in 2007, but he declined to provide numbers.
He's not alone in experiencing an increase.
"Activity is definitely up, and auctions are shaking out the motivated seller who needs to sell," said Sherman Hostetter Jr., an auctioneer at Hostetter Auctioneers in Beaver Falls.
Today, about 90 percent of houses listed in an auction are sold. A lot of the success depends on the location of the property, he said.
"If the house is in Cranberry or Beaver County, expect to get a lot of bidders. But if it is in a distressed area, turnout of bidders may be limited, and either the final auction bid may be lower than what the seller expects, or no bid at all," he added.
Even if auctions fail to produce a bona fide offer, they have other advantages, auctioneers say.
"It brings out the motivated buyer, someone who may not have previously considered the property," said Kathy Steigerwald, senior associate broker at Harry Davis.
She points to what happened at Saturday's house auction held at 5432 Howe St., Shadyside.
Although about a dozen people showed up for the auction, the highest bid on the three-story, four-bedroom house, which initially had been listed for $599,000, was $287,500 from bidder Brint Motheral.
"We received more calls Monday on the property and currently are negotiating with three offers, which are higher than the bid amount," Steigerwald said. …