October 26, 2000

Auctions enjoying new-found popularity

With interest rates heading down and property in most areas continuing to appreciate at a healthy pace, why are so many auctions being advertised in newspapers and magazines?

Auctions have become a convenient, efficient method of moving inventory in a hurry, and that includes all types of real estate. The auction, which historically included the image of Snidely Whiplash in a black top hat selling off the farm to the highest bidder, is no longer synonymous with desperation and bankruptcy. The Internet also has brought property bidding to the family den, with online giants like Priceline and EBay jumping into the real estate cyber space.

The growing interest has also fostered traditional builders to blend onsite auctions with online auctions. For example, one of the nation's most successful homebuilders, Shea Homes, recently announced its first online bid-sale event. Buyers can take an online virtual tour of the homes, download a brochure and pre-qualify for a loan from Shea Mortgage.

In addition, the traditional auction companies are enjoying some of the energy and popularity of their online cousins, making their sealed-bid offerings and onsite gatherings more intriguing. These auctions are also not typically affected by interest rates or economic environments. Corporations, public agencies and institutions routinely liquidate "real estate owned" portfolios to free up cash for other projects.

For example, Snohomish County is offering five residential development properties zoned for apartments and single-family housing located in Everett, Stanwood, Darrington and Sultan as part of a sealed-bid auction conducted by Realty Marketing Northwest.  According to Patsy Danhof, Snohomish County property administrator, the properties simply have been designated as surplus.

"The properties are being offered in a multiple-state auction campaign so that we can expand the base of buyers," Danhof said.

The county, which held a similar event in the spring, has found the method is more effective and less expensive than conventional listing and advertising through independent real estate companies - especially when the tracts contain a significant amount of timber. Timber buyers often appear at known corporate auctions, saving the seller valuable holding time.

According to Tim Reinertsen, senior vice-president of Realty Marketing Northwest, the tracts zoned for single-family housing range from 14.75 acres to 27.39 acres. There is one property zoned for multi-family use in Everett and a small multi-unit site in Sultan.

Realty Marketing/Northwest, with an office in Issaquah, (1-800-822-4669; http://www.rmnw-auctions.com) is acting as the auction marketing consultant with all bids to be submitted directly to Snohomish County's Property Management Department on November 17. The company not only represents owners of small recreational and residential properties, but also has clients with large commercial, industrial, ranch and timber parcels - such as Weyerhaeuser and The Nature Conservancy.

Also on the block is the Pincus Farms Development Tract in south Pierce County, an interesting, 27-parcel package previously the home of a Christmas tree farm. The trees were harvested and replanted seven years ago on the 600-acre property, which also contains an older farmhouse and barn.

A single-family building lot in Tacoma will also be auction by Realty Marketing Northwest as part of its four-state event. The lot, on South Fife Street, is unimproved and carries a published reserve of $7,000.

There is a single-family building lot covered with mature timber in Suquamish, Kitsap County, not far from the Agate Pass Bridge and Bainbridge Island. The lot, on 0.44 of an acre, is zone rural residential and carries a published reserve of $13,500.

Realty Marketing's highlight property is the Yellowstone Trophy Ranch and Resort on 1,420 acres in Island Park, Idaho. It is 30 minutes from West Yellowstone by car and features a year-round guest ranch with lodge, 12 cabins, bunkhouse, show barn, rodeo arena and approved subdivision. The preliminary plat approval is for 80 additional home sites near Henry's Fork of the Snake River. You can buy the whole shootin' match for $5,230,000 or pick up separate parcels beginning at $650,000.

And, talking about corporate retreats and exclusive family getaways, The National Auction Group, Inc., based in Alabama (1-888-266-1709; http://www.national-auction.com) is offering the Eagle Nook Ocean Wilderness Resort on Barkley Sound in British Columbia. The property, on 70 secluded acres on Vancouver Island's Vernon Bay, will be sold to the highest bidder -- no published reserves, no minimum bid. The lodge comes with all furnishings and appointments and includes a manager's suite, office/gift shop, sea cave, 23 guest rooms plus a wharf with landing area.

I wonder if the new owner will need somebody to oversee the gift shop and wharf?

Previous columns:

• Election mojo and mortgages, 10-19-2000
• IRS OKs reverse exchanges  , 10-12-2000
• New NAR economist sees lower rates ahead, 10-05-2000
• Dot-coms offer help to renters, 09-28-2000
• Helping the kids buy that 1st house, 09-21-2000
• Dorm option: Do you really want to play landlord?, 09-14-2000
• Location, location, schools, 09-07-2000
• Beware the predatory lenders, 08-31-2000