Wilmington NC – Like many southern cities, Wilmington is feeling the pinch caused by the ailing housing market.  With lenders tightening standards and gas prices sending the economy spiraling down, homes continue to sit on the market.  Increasingly though, homeowners are searching for alternatives to simply listing their homes and waiting it out. 

New promise comes from real estate auctions, a marketing method once thought to only be useful in foreclosure situations.  Jeff Weinberg – CEO of Auction Orange explains “We deal with many people who are not in a distressed sale situation.  Selling property at auction moves the process along and avoids the lengthy negotiation involved with traditional sales.  We set a date, market to potential buyers, let prospective bidders check out the property, we have the sale and the high bidder wins.”

The prospect of selling a home in 45 seconds and closing in 30 days is becoming a significant enticement in a market where homes may sit for a year or more without an offer.  “People are starting to realize that the market is way down and asking for last year’s price isn’t going to get them anywhere.”  Weinberg explains,   “When a homeowner finally accepts that the current market conditions determine price and not what was paid for the property a few years ago, an auction can be of great benefit in finding a new owner for a home.  Prices don’t always go up.”

Weinberg points to the analogy of the stock market.  “The financial markets are great big auctions with lots of bidders.  If the market determines that the price of your IBM stock is less today than it was yesterday, we can’t argue.  The market has spoken.  Its no different with a home, but most folks don’t want to acknowledge that the price of a home may have fallen.”

The real advantage to an auction is the speed and efficiency.  Homeowners have to shell out thousands in mortgage and interest payments while their home sits.  Even if a conventional offer comes in, there is still the dickering over repairs, mortgage contingencies and the like.  With buyers in control of the market today, many hold out until they get their terms and will drop out of contracts at the drop of a hat.  Sales at auction typically have no contingencies for financing or inspections.  Bidders are expected to have their funds lined up and their inspections done in advance before bidding.  Weinberg goes on,” When we drop the hammer on auction day, the deal is done.  Buyers take care of due diligence before they can get a bidder card.”

Auctions aren’t for everyone though.  A buyer must not be “upside down” or have too little equity.  In those cases, the bank can often be owed more than the house might sell for.  Sellers have to be ready to accept what the market says the home is worth.  An experienced auctioneer can give a homeowner a good idea of what to expect.  “Everyone asks what happens if the house sells for $100.  It won’t happen.  Where there is a potential for profit or some instant equity, buyers will come out in droves.  Sometimes the bidding becomes personal and several bidders will simply want to win out over the others.  While it isn’t a good strategy from a bidder’s point of view, it’s a fact that sometimes makes a winner out of the seller, who gets a price far in excess of what might come in from a conventional listing.  That’s something that will make any potential seller smile in this market.”