Making buying, selling easier Real estate auctions can ease deal-making, firm's owner says

Expo at Camden Yards

Company aims to educate buyers, sellers on the process

March 09, 1997|By Robert Nusgart | Robert Nusgart,SUN REAL ESTATE EDITOR

Purchasing a home can be a trying, confusing yet exhilarating and rewarding time in a person's life.

Usually, sellers and buyers enlist real estate brokers to do business. But Ann von Forthuber wants those sellers and buyers to look at doing business another way -- a way that many times gets the buyer a bargain and the seller a sigh of relief.

It's the auction sale, and it's one of the areas of real estate that will be explored Saturday at the Home Buyer's Expo being held 10 a.m. to 5 p.m. at the club level of Oriole Park at Camden Yards. The Expo will focus on first-time homebuyers, and von Forthuber, who owns Auction & Estate Representatives, will be holding a seminar on taking the mystery out of buying and selling.

Auctions can be confounding to buyers and sellers, but once a seller or buyer gets educated, says von Forthuber, most confusion dissipates and excitement takes over.

"They will learn some of the things to look for and some of the things that buy buyer's confidence about coming to an auction," she said. "It can be intimidating, and it's because in the past most of the exposure that people have ever heard about auctions have been a distressed situation."

However, von Forthuber's company tries to stay away from those kinds of situations.

"We do auctions for people whose houses have never been listed," she said. "There's no debt on them. The titles are guaranteed. We sell it; we settle it. We hold everybody's hand and we get a lotof first-time buyers, mainly because we are a real estate company, but we specialize in auctions."

To get people educated, she plans to distribute a list of terms used in the auction business. Among them are the different categories of sales that a potential buyer might see in the classified section of a newspaper.

"A foreclosure sale will give you clear title, but you don't know what kind of other headaches you might be inheriting," she said.

"An estate sale means that the person owning the property is deceased and, generally, the children or whoever inherited it has no use for the property and wants it sold expeditiously.

"A trustee sale means that there has been a court-appointed trustee to oversee the disposition of the property. It could be a divorce situation; it could be a bankruptcy situation generally I get to where it's going, to where it's gone, and I turn to the trustee and say, 'Mr. Trustee, what are the beneficiaries' wishes?' and the trustee generally will say, 'Sell it!' I've never had one turn around and say 'Don't sell it.' "

She also said a guardian's sale is held much in the same way that a trustee sale is held, but instead of a trustee, many times it is someone who has guardianship powers.

But the education doesn't stop at knowing the lingo.

"First thing they should do is talk to a lender, because if they don't have cash they are going to have to get a mortgage," she said. "They need to know before they come to the auction how much they can afford.

"The contract that they sign at auction is a no-contingency contract. It's not dependent on them getting financing [unlike a regular sales contract]. It says they can either pay cash or get a mortgage, but it is up to them to settle in a specified amount of time. So you get serious buyers and you get people who know what they can afford to buy."

The next most important aspect of buying at auction is previewing the property and getting to know it as much as possible, because when a person buys it is a "where is, as is" sale.

"We don't want anybody saying afterward, 'Oh, I didn't know it didn't have appliances.' What you see is what you get," von Forthuber said, adding that her company will give prospective bidders as much information about the property as possible. "They'll know just as much about the property as we know," she said.

It's that kind of touch that von Forthuber, who is one the few women in the country to run their own auction business, tries to give.

"There are other auctioneers in town who put up a sign, drop an ad in the paper and call a sale," she said. "But that's where it stops. They say, 'Mr. Seller meet Mr. Buyer,' shake hands and good luck.

"My peers have chastised me because I do my auctions from more of a real estate point of view.

"We keep it together through settlement. I'm the newer kid on the block compared to the many years others have been in business," she said, adding that she auctions off between 100 and 120 properties a year.

She said the customary commission for sellers to pay is 10 percent, which is higher than going the traditional real estate agent route. But she defends it by saying, "We are doing more work in a shorter period of time." And that's the benefit a seller gets when they put a property through auction.

"The seller knows when it will be sold, when it will be settled," she said. "They also know it will sell, generally speaking, below market [value]. But the buyer will pay the cost of closing."

In fact, von Forthuber says, 85 percent of the time a property will go for below market value, but the rest will "sell way out of sight from what we ever expect."

"The auction method is the only way of selling that gives the seller the opportunity to possibly get more than what his asking price might have been," she said. "It's also the only way of selling that a buyer will buy at what he's willing to pay for it.

"You can't go into a department store and bargain on the price of a coat. Come to an auction and you can bid on what you're willing to pay for it."

Pub Date: 3/09/97

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