- The Washington Times - Monday, June 21, 2004

Jon Levinson stood in the back yard of a home in Ellicott City, Md., one afternoon last week and told a crowd of about 20 people why the swimming pool, modern kitchen and new heat pump make it a great bargain.

The home’s owners tapped Mr. Levinson, vice president of Alex Cooper Auctioneers Inc., to help them sell the property. The house isn’t in foreclosure; the owners simply believed auctioning it off would be the quickest and cheapest way to unload the property.

Mr. Levinson opened the bidding at $250,000.

The price moved quickly to $275,000, then $300,000, then $310,000.

“Do I hear 320?” Mr. Levinson asked.

He did.

The bidding continued: $340,000, then $350,000, then $360,000.

“I have 360. I have 360,” Mr. Levinson said.

He told the crowd that other houses in the neighborhood have been appraised at $500,000, and reminded them that “this property will absolutely exchange ownership today.”

“Now do I hear 380?” he said.

The bids came in rapid succession.

“I have 390. I got 400. I have 410,” Mr. Levinson said.

A voice in the crowd called out “415.”

“I’ve got $415,000. Four-one-five. I got $415,000 going once. I got $415,000 going twice. Anyone? Anyone?”

“Sold.”

Auctions aren’t just for foreclosures and distressed properties. Auctioneers say more homeowners are skipping real estate agents and using auctions to sell their homes.

Residential property auctions generated more than $54.5 billion in 2002, five times as much as in 1980, according to the most recent data from Gwent Group, a Bloomington, Ind., industry research firm. Figures on the actual number of homes sold through auctions during this period were unavailable.

“We have a hot real estate market right now. In many cases, this beats [hiring a real estate agent] to sell your house,” said Joseph A. Cooper, president of Alex Cooper Auctioneers Inc., which sells homes, antiques and Oriental rugs.

Auctions “are not uncommon,” but they still account for a tiny fraction of all residential real estate sales, said Walt Molony, a spokesman for the National Association of Realtors trade group.

“Most people still want a full service brokerage. It gives you the widest exposure to the market possible,” Mr. Molony said.

Auctions are more common in other countries, especially Australia, Ireland and New Zealand. They occur regularly, but less frequently, in Britain.

Homeowners who have sold property through auctions say they like them because there is no dickering on price, all sales are final and there are no real estate commissions, which are typically 6 percent of the sale price paid by the home seller.

Alex Cooper Auctioneers charges two fees.

Sellers pay to have the firm advertise their property. This fee varies from client to client, depending upon how many newspapers are used and how often the ad appears, a company spokesman said.

Buyers pay the firm a 5 percent “buyer’s premium.” The high bid for the Ellicott City home was $415,000, but with the buyer’s premium, the final sale price ended up being $435,750, according to Mr. Levinson.

Mr. Molony, the National Association of Realtors spokesman, said there are risks to buying and selling a home through an auction. For example, he said buyers aren’t always given an opportunity to have a property inspected before they bid on it, although an Alex Cooper spokesman said its clients are given that opportunity.

Also, auctions tend to attract bargain hunters, so sellers may not get the full value of their property, Mr. Molony said.

This wasn’t the case for Jim and Leah Rymut, the owners of the Ellicott City home. Mr. Rymut said his $415,000 sale price was $70,000 more than he expected to fetch.

The couple, part-time real estate investors, traveled the region checking out home auctions.

“I’ve been to a lot of these. The price always goes up,” Mr. Rymut said.

The Rymuts said selling their house at an auction was more relaxed than selling it through a real estate agent.

The seller typically holds an open house a few days before the auction, giving potential buyers a chance to check the property from the inside out.

Since there is only one open house, sellers don’t have to keep their house tidy at all times in case a real estate agent drops in with a client. On the day of the Rymuts’ auction, dirty dishes were stacked in the kitchen sink.

Shahida Suleman, the high bidder at the Rymuts’ auction, declined to be interviewed.

After the auction, she spent about 15 minutes filling out paperwork with Mr. Levinson and Mr. Rymut at the kitchen table.

The property will officially exchange hands when the Rymuts and Ms. Suleman go to settlement, Mr. Levinson said.

“It’s that easy,” he said.

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