BY LARRY FINLEY, Real Estate Reporter
...Steven H. Baumann, president of Westar Properties Inc. of Oak Brook, said he is getting five times as many calls as last year from people seeking help selling their properties.
"Not all of their properties are good candidates for an auction," he said. "We want a property that is a good quality property, without any liens or encumbrances, and of course, the better the location, the better the property."
Quality homes include new single-family houses such as four in an auction Nov. 14. They included two large houses at the Arbor Lakes of Green Oaks development near Libertyville. The 4-bedroom houses were both priced at more than $1 million. Opening bids were set at $575,000. He also has other single-family homes and six-flats in Arlington Heights and Glenview. (www.westarproperties.com)
"In a soft market, when sellers are having a difficult time selling their properties, time is money," he said. "The carrying costs can be eroding their profits. So . . . to limit their costs, an auction may be their best option."
Traditionally, spring and fall are the best time for conventional home sales, but auctions can be successful any time of the year, he said. Auctions are not as formidable as they might seem to someone who has never been to one, Baumann said.
"Interested prospects see our advertisement in the paper, or signage on the property," he said. "Then they call our office for a brochure [630-705-5500]. It has a description of the property, terms of sale and the scheduled open house dates and times."
Three to five open houses are held three or four weeks before the sale. This gives potential buyers a chance for a close inspection. In addition, they receive additional material on the property, plus a package of information on the auction process.
"We understand that most people have never been to an auction, so we have auction company representatives at the open houses to explain what they need to do," he said. "Some people can get intimidated, but an auction is really quite easy."
The auction itself is typically held in a hotel meeting room. The bidders will be asked to bring a certified or cashier's check, in a specified amount, as "earnest money." If they are the winning bidder, they will be asked to increase their deposit to anywhere from 7 percent to 10 percent of their total purchase price, he said. They also will be asked to sign a contract, included in their bidder's package. The closing will take place approximately 30 to 45 days after the auction.
Baumann conducts approximately one auction per month, consisting of six to nine properties. Some bidders are referred by other brokers, he said, who receive a referral fee.
"Buyers are getting good deals and sellers are happy to be selling," he said. "Our job is to bring the parties together to make deals that otherwise would be improbable."
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