For nine months, Brenda Hinden attempted to sell her four-unit Adamstown apartment building on the real estate market.
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During that time, fewer than two dozen people went through the property, and "I had only one offer," she said.
So Hinden decided to try a public auction, something she had done successfully before.
In late August, at a sale conducted by Kline, Kreider & Good Auctioneers, her two-story building at 166 and 168 E. Main St. brought $200,000. The price more than satisfied her.
"I'm really hooked," Hinden said. "I told my friends, 'Public auction is the way to go.' "
Nationally, real estate auctions have been booming. And while such sales have long been popular in Lancaster County, some auctioneers report that the struggling real estate market is leading more people to check out the auction route.
Auctions, an alternativeIn 2007, total real estate sold at auction in the U.S. (covering the residential, commercial/industrial and land/agricultural categories) amounted to $58.5 billion, according to the National Auctioneers Association. Last year's numbers are not yet available.
In an e-mail, Chris Longly, director of public affairs and communications for the NAA, wrote: "Real estate auctions are the fastest-growing sector of the live auction industry."
From 2003-2007, the NAA reports, auction proceeds shot up 32.7 percent in commercial and industrial real estate; 36.3 percent in land and agricultural real estate; and 46.6 percent — from $11.5 to $16.9 billion — in residential real estate.
Kline, Kreider & Good Auctioneers, based in Stevens, typically conducts up to 200 public sales of real estate a year, said auctioneer Randal V. Kline.
But in this real estate climate, they've noticed an uptick in calls from sellers who've failed to find buyers the traditional way — as Hinden did — and now want to try a public auction, he said.
"It might be a little more now than what it had been," Kline said of the number of inquiries.
"We've gotten calls from people who've had their house on the market six, eight months" without receiving a single offer, he said.
Auctions become an "alternative marketing method" for sellers like that, Kline said.
Jay M. Witman said his company, Witman Auctioneers Inc., Manheim, receives 20 to 25 calls a week from property owners interested in real estate auctions.
Aaron E. Martin, of Aaron E. Martin Auction Service, Ephrata, also has seen interest from people who've had trouble selling their property.
Real estate auctions "are pretty much my specialty," he said; most are houses or apartment buildings, Martin said.
And they usually fetch satisfactory prices. Last year, 100 percent of the real estate auctions Martin conducted produced a buyer, he said, which means none were withdrawn because the minimum bid threshold wasn't met.
In fact, one apartment building he recently sold was co-owned by a real estate agent who told him the final auction price was $45,000 more than what the agent would've listed it at, Martin said.
Kline, who's also an owner of Kingsway Realty and a real estate broker, said there are numerous advantages to selling real estate by auction.
First, because public sales are held on a specific date, "you can make your plans if you're moving," he said.
Second, public sales eliminate seller carrying costs, like utilities, since the home doesn't sit unoccupied for an unknown period until a buyer is found, he said.
Third, auctions create competition among potential buyers (who must prequalify before the sale) by getting them together in one place, he said.
Fourth, Kline said, the seller typically pays 1 percent of the real estate transfer tax — while the buyer handles the other 1 percent — instead of having to fork over the entire 2 percent.
And while there's a 6 percent commission to sell through a real estate agent, auctioneers typically charge 2 to 3 percent, he said.
In essence, an auction reveals a property's true market value "because it goes to the bidder willing to pay the most," Kline said.
Leading up to the public sale of her apartment building, Hinden said, three open houses were held to generate interest, and they were well-attended. "At least you're bringing people to your property," she said.
But not all real estate would sell well at a public sale, Kline said.
Witman concurred. "Some we can [sell], some we can't," he said. "It's really not for everybody."
For example, most city homes and those in developments would probably do best on the real estate market, Kline said.
Rural properties, on the other hand, including lots with a sizable amount of acreage, "will bring more at auction," he said.
Martin agreed.
"Any country property or unique property," he said, should be good auction material.
Paula Wolf is a staff writer for the Sunday News. She can be reached by e-mail at pwolf@lnpnews.com.
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