IT’S 8 P.M., YOU’RE BATHING THE KIDS and the dinner dishes are still piled high in the sink. Then comes the dreaded call. Your real estate agent wants to show your house…now. Is there an alternative?
Definitely, says Michael Marienwald, president of London-based North American Auctioneers. “We’re the only ones who are able to guarantee your house to be sold on the day you want it for as much as you want or more.”
Established in 1999 as an affiliated company of Anchor Real Estate Investments Corp., North American Auctioneers offers sellers an alternative to conventional real estate marketing while maintaining the benefits and services associated with a standard real estate listing.
Contrary to popular perception, Marienwald says the auctions (both residential and commercial properties) usually aren’t about foreclosures or a desperate need to dump property for rock-bottom prices, though such situations do cross his path. In most cases, Marienwald sells properties for the listing price or more. “The seller calls the shots”, he says.
Here’s how a typical residential auction works. Marienwald, a licensed real estate broker, presents the seller with a detailed proposal for marketing a property. Costs range from $1,000 to $3,000 for a single-family home (the seller is not responsible for paying real estate commission, usually 6%; the buyer pays the charge). The home is listed on MLS (Multiple Listing Service) and an auction date is set. If the home is not sold prior to that date, bidders attend the auction with a certified cheque or cash in-hand for down payment on the property. There are no sale conditions.
According to Marienwald, marketing is the key to a successful real estate auction. He targets potential purchasers with flyers and other marketing materials. “When I have 15 people in front of me all interested in buying one property, I have the market in front of me because we’ve done our work,” he says. “How many times do people in London have 15 people bidding on their house? That’s a regular thing (at an auction).”
Marienwald points to a number of recent sales, including a 3,500-square foot commercial property he promoted by sending flyers to every business in London and surrounding area that might be interested in the property. The reserve was set at $150,000; it sold for $164,000 at auction. Another agent-represented property, listed at $205,000, sold for $240,500 at auction after the listing had expired.
“These results aren’t always the case,” notes Marienwald, “but in most instances the seller gets their asking price or more.”
In early October, North American Auctioneers sold the London Ice House on behalf of London Knights owners, Mark and Dale Hunter. Ownership of the arena reverted back to the Hunters when the operators, who had turned it into an indoor dirt bike facility, defaulted on the mortgage. Though the 45,000-square-foot building itself only sold for $150,000, it was a multi-parcel deal that included a 10-acre piece of land behind the building, which sold for $553,000.
With a pre-auction bid of $800,000, with conditions until April 1, 2004, the Hunters were looking at paying almost $9000 a month (mainly taxes) on the empty building. By auctioning both the building and land (to two different buyers) for $714,000 with no conditions, Marienwald says the Hunters saved approximately $80,000 in payments.
“We sold it for about $60,000 less (than the pre-auction bid), but it closed in 30 days with no conditions,” observes Marienwald. “If you’re paying $9,000 a month to carry a property, you want it sold now, without conditions. In the end, we got market value for it.”
Next year, North American Auctioneers will open an office in Toronto, and Marienwald expects to auction his first Toronto-area property early in the new year.