Real estate auctions for the masses have become popular in Southern California, so Harcourts International Ltd. is making the service available to offices in Oregon, said Ben Brady, international director of auctions.
With many home sellers in Bend receiving multiple offers, auctions might seem like the next logical step for a hot real estate market. Brady said Harcourts hopes to see auctions become a common way to sell under all kinds of conditions, just as they are in Australia and New Zealand.
“It was because of demand originally,” Brady said. “The reason it stuck is because of the transparency it provides.”
Brady was in Bend recently to talk with brokers at The Garner Group, which hopes to hold its first auction in six to eight weeks, managing principal broker Sara LaFaver said. The office already has a few sellers who want to use the auction service and will delay their listings until the option is available, she said.
Most of the auctions that have taken place in Central Oregon were for distressed properties, LaFaver said.
Harcourts is willing to auction any nondistressed property, regardless of price range, Brady said.
“All properties can be auctioned,” he said. “It just comes back down to whether or not people are open to it.”
Auctions tend to net a higher price than the typical sale process, Brady said. While that’s a clear advantage for sellers, Harcourts is also touting the benefits of auctions for buyers.
Potential buyers are frustrated because they’re losing out on houses they want, and they don’t know by how much, LaFaver said. At a live auction, all the offers are out in the open, and buyers will have a chance to bid up, if they can afford it, LaFaver said.
Broker Rian Palfrey of Core Real Estate Services in Bend said brokerages are always looking for a way to stand out from the crowd, and auction services are one way to do that. But he doesn’t see how an auction benefits buyers.
“It’s going to benefit the seller. It’s going to drive prices up,” he said. “Prices are already pretty high.”
Gina Dunker, a broker with Allison James Estates & Homes, has represented buyers in online auctions of bank-owned properties, and she found the Harcourts auction service intriguing.
“I could see how it would eliminate some of the buyer’s stress,” she said. “The multiple offer situation is definitely stressful.”
By law, brokers are not allowed to disclose other buyers’ offers, so people who offer more than the list price are left wondering who beat them out and by how much, Dunker said. Some would-be buyers have been so frustrated, she said, they looked up the sale price after the deal closed and their opportunity was well in the past.
Harcourts has eliminated aspects of traditional auctions that might turn off consumers, Brady said. Sellers can set a reserve price, which is a minimum that must be met, or the property won’t be sold. And buyers do not have to pay a commission to the auction company.
The cost of the auction service is paid by the local brokerage, which must share the listing agent’s commission with Harcourts, LaFaver said. Buyer’s agents will be paid the same as in any nonauction transaction, she said.
Because it’s exclusive to Harcourts listings, the auction service also serves as a marketing tool for The Garner Group. The firm currently has $24 million in single-family home listings in Central Oregon, making it the third-largest brokerage by dollar volume of single-family listings, and it’s growing, LaFaver said.
The Garner Group has 31 brokers, three of whom were hired since LaFaver and her two cousins, Erica Davis and Shelley Griffin, acquired the firm in January from founder Sandy Garner. Garner, 70, will continue working as a broker.
The group recently expanded its NorthWest Crossing office space by 900 square feet. The auctions will take place in The Garner Group’s meeting room.
Brady, the auctioneer, anticipates that the auction will cover two or more listings at one time with open houses held in advance.
There are 35 Harcourts offices in Southern California doing auctions, and so far 92.5 percent of the 657 properties that have been auctioned were sold, Brady said. Seeing that success rate, brokers in Oregon asked Harcourts to make the service available to them, he said.
Harcourts Real Estate Network Group in Clackamas has already conducted an auction, Brady said. Harcourts offices in Nevada, Washington, Canada and Hawaii are also doing auctions, he said.