House auction a loss for owners
26.10.2006
ROCHESTER HILLS -- Risky from the start, a live auction of a house that started at $1 today ended in a sale of $332,000 -- more than $40,000 less than a couple paid for it last year.
October 22, 2006
Joe Menard / The Detroit News
ROCHESTER HILLS -- Risky from the start, a live auction of a house that started at $1 today ended in a sale of $332,000 -- more than $40,000 less than a couple paid for it last year.
James and Gabriele Rudin, who are moving to Texas, said they knew they wouldn't get the $389,900 they had previously sought for the 3,100 square-foot Tudor through traditional means, but hoped they'd sell it for about $350,000.
The bidding never made it that high. Real estate broker Joel Ervin of Auburn Hills outlasted other bidders and bought the house for an investor in the investment division of his company, RE Realty in Farmington Hills.
"I'm very surprised that we got it for what we got it for," said Ervin. "It's an amazing property."
Only 1 percent of real estate is sold nationally at auction, according to the National Association of Realtors. And auctioned properties run the risk of selling for less than they're worth.
More than 100 people came to the auction, many with hopes of getting the home at the end of a cul-de-sac in a manicured subdivision for a steal.
But the bidding quickly escalated, going from $1 to $175,000 in one bid, knocking many hopefuls out of contention. Dozens more walked away quietly as the bidding cleared $300,000.
The Rudins remained hopeful as bids reached $330,000, but bidding suddenly stalled. Gabriela Rudin chewed her gum nervously as she sought a $335,000 bid.
There were no takers.
After reminding bidders of the $390,000 appraisal on the three-bedroom house on a wooded lot, she asked for a $331,000 bid.
There was a long silence before a couple met the bid, but was quickly countered by Ervin's $332,000 offer. Another long pause followed, but not any bids.
"I'm a bit disappointed for what it went for. But that's the risk we took," said James Rudin, a 31-year-old automotive engineer from England. "I don't think we would have had any better luck had we done it any other way. It's the market."
Real estate agent Bill Maliszewski, who came to the auction out of curiosity, said the couple got about what the market would bear in the economy. In Metro Detroit, home sales dipped 8 percent in the second quarter of this year, its biggest drop in nearly two decades.
"It sold for probably what that market value was," Maliszewski said. He added that there was no way the Rudins were going to get what they paid for the house. "Not in this market."
Despite their disappointment in the final selling price, the Rudins said the auction was fun and helped them unload the home quicker than if they had let the market run its course. Plus, by auctioning the house they avoided selling any Realtor fees.
"I don't think we would have gotten more (money) and it would have been on the market at least another six months," James Rudin said. "It's good that it's done."
A Chicago-based developer plans to auction 47 homes and 40 undeveloped home sites throughout Metro Detroit in November to unload its inventory in the soft real estate market. Neumann Homes will hold the auction at 2 p.m. Nov. 19 at Somerset Inn, 2601 W. Big Beaver in Troy. For information, call (888) 442-8008
You can reach Joe Menard at (248) 647-7429 or jmenard@detnews.com
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