Can the same marketing panache used to move antiques, artwork and estate collections at indoor auctions be used successfully to hawk homes?
Sandra Blaker, a Columbia resident with experience in the real estate and auction fields, thinks so. She is one of a small, but growing number of people in the real estate industry locally and nationwide to use the auction as a way to move homes.
"The same principals that are used to auction fine arts and furniture can easily apply to selling homes," said Ms. Blaker.
Her new Columbia-based venture, Accelerated Marketing Services, plans to find out just how well the concept works when it conducts its first auction of homes beginning at 11 a.m. Feb. 25 at the Pikesville Hilton.
Packaging several properties into one auction event is an established sales technique for commercial real estate, and that method has begun to spill over into the residential market.
In November, for example, Long & Foster Real Estate Inc., one of the region's largest real estate companies, auctioned 104 properties in a four-day residential auction in Baltimore, Washington and Northern Virginia.
So far, Ms. Blaker's new company has 10 homes signed up for next month's auction, most of them in Baltimore City and Baltimore County. She expects to have at least 25 the day of the auction, citing strong interest from real estate companies looking to spur business in a stagnant market.
"Getting a lot of people in one room generates excitement, and that's the key to getting prices to go way up," said Ms. Blaker.
'An innovative approach'
Michael McNamara, an Elkridge resident whose three-bedroom town home has been on the market for six months, is among those who have turned to Ms. Blaker's company for help.
"The market is still really slow, and this looked like an innovative approach to get lookers and, hopefully, a buyer," said Mr. McNamara. "If nothing else, it will give the home additional exposure."
Like all sellers placing their properties in the auction event, Mr. McNamara can set a minimum bid for which he is willing to let his property be sold; in his case he hopes to get about $111,000 for the house, which he purchased in 1989.
If his home sells, Mr. McNamara will save about 5 percent to 7 percent of the sale price that he otherwise would have had to pay as a sales commission to his real estate broker.
Successful buyers at the auction will have to pay what's known as a "buyer's premium" on top of the sales price.
10% buyer's premium
Accelerated Marketing plans to charge a buyer's premium of 10 percent of the sales price. Half will go to the listing agent or broker and half will go to the auction company, Ms. Blaker said.
To move sales along, the company has lined up several mortgage companies to pre-qualify prospective buyers before and at the event so they know just how much money they can afford to bid. All bidders would have to be pre-qualified by one of the lenders or on their own ahead of time, she said.
Bidders also must have on hand a certified check for $1,000 for a nonreturnable deposit should they successfully bid on a home.
Accelerated Marketing plans to have assistants on the floor to answer questions, and title companies on hand to schedule a settlement date.
"It's set up to be very simple: one-stop shopping for the buyer," Ms. Blaker said.
Jan Tarnow, the Chicago-based auction manager for the National Association of Realtors, says becoming pre-qualified by a mortgage lender is important for a good reason.
"The bidding can get hot and heavy and they can get caught up in the excitement and go over what they can afford," she said.
"The best thing to do is to go in with a bottom-line figure and stick with that."
A down market
Elsewhere in the nation, the mass indoor home auction event has been used with increasing success for some time, said Ms. Tarnow.
Subdivision developers, in particular, use it in the Chicago area to open or close out sales in a new community, she said. "Even in a down market, it can generate a lot of interest," she said.