Pushing the envelope of the traditional broker/MLS business model, Prudential Northwest Properties (PNP), a major Portland/Vancouver brokerage firm has just launched its Auction Division, the first of its kind in the area. Headed by licensed auctioneer and associate broker Mark Brown, the Auction Division is designed to provide a viable alternative to the way real estate is traditionally bought and sold in the Pacific Northwest.

The first auction is scheduled in Portland for July 29th, 1999. The homes presented for auction will be exclusively broker-represented, owner-occupied residential properties. Prospective buyers are encouraged to tour homes of interest with their real estate agent prior to the auction event. Each home to be auctioned will be held Open for public previews and inspections at specific times during the weeks prior to auction. Inquiries are directed to the listing agents of the featured homes. Homes are vigorously marketed before, during and after each auction.

"We aren't just trying to set up an auction situation for bids," explains Brown. "We want the homes to sell. "

The Auction Division is set up like a branch office, with auctions planned on a regular basis every couple of months. This plan gives agents time to market the concept to home sellers and to whet the interest of home buyers. Employing a unique team concept, the listing agent works with the auction division to market the home. In fact, agents from other companies are welcomed to participate.

"If the home sells before the auctions, we count that as a win because we work to sell the home before, during and after the auction. Sometimes people don't want to get into a competitive bid situation so they will make an offer on the home before the auction," says Brown.

The home auction concept is being embraced by high end property sellers in the area. Of nine homes chosen to participate in the on-site auction, the average listing price at $325,000 is almost double that of the average Portland listing of about $170,000.

The popularity of the auctions may simply reflect the fact that there are fewer buyers in the upper price ranges of homes, but the properties are nonetheless desirable.

Marketing fees are paid in advance by the seller, and with no objections to date, according to Brown. That's because sellers, their homes and the market must be qualified to suit the auction environment. The Auction Division looks at three criteria to include a home in the on-site auction calendar: the seller must be motivated with a time-driven need to sell; the property must qualify with at least 25% equity accrued; and the property must have a unique marketable feature, such as a lake frontage. One home to be auctioned was designed by famous architect Frank Lloyd Wright.

But a Wright-designed home is hardly something for the bargain basement. Why would such a home meet the auction criteria? Two reasons - the owners of desirable properties are better able to afford the auction concept and despite being motivated, either through company transfers or the purchase of another home, they are not in a distress situation. "The higher income brackets understand the time value of money," offers Brown.

"There is ton of inventory on the market," suggests Brown. "The buyers have no reason to hurry up and auctions are great for putting a timeline on the marketing of a home and focusing the buyer."

"When we launched this program, we still have not had time to talk to everyone and we had over 200 leads to follow up. We chose only nine homes to launch the program."

In defending PNP's choosiness about the homes, Brown says the company views auction as a supplement to MLS. "There are homes that fit the traditional style of marketing and homes that fit the auction style," says Brown. "The difference is people who want to maximize their investment and those are ideal properties for traditional listings. Auctions are better for time-driven or need to sell."

The best case scenario, suggests Brown, is if the house has never been listed. Then a price isn't associated with a home in the public's mind. He also thinks hot markets will present the most interesting results. "If you get an offer on a home immediately, how do you know how much more you could have gotten unless you gather a crowd and call for the bids?

"It is the team approach between the agents and the auction division, that Brown feels will make the auction concept work. It gives the agent another way to market the home besides the MLS and the owner has another means for exposing the home. P>"We have been studying the success rate of on-site auctions on a national scale, and feel confident the auction process will be a hit with both home buyers and sellers in our marketplace," said Brown. "We've put together a team effort with Fidelity Title, Columbia Mortgage, and our own Prudential Northwest Properties Marketing and Information Technology specialists to create an outstanding program.

"The public will soon see that auctions are a terrific way for buyers to get great bargains on real estate and for sellers to move properties quickly at fair market values."

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Published: July 12, 1999

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.