Rachel Rabinowitz

You may remember this movie with Alec Baldwin from the Summer of 1994, "The Shadow". It was promoted with the tagline, "Who knows what evil lurks in the hearts of men?". The Shadow was a a crime fighting vigliante with psyphic powers, a"pulp hero" from 1930's radio. Orsen Welles himself even did some of the voiceovers for the original radio episodes.

From what I understand, the 1930's were not an easy time to sell real estate. Do you think there is a correlation between a difficult economic climate and the increased interest in superheros? I do. Lets face it, when times get tough, we need the services of a superhero more than ever. Only I don't think we could call him "The Shadow" - these days that word in our industry is reserved for the inventory backlog in the housing market.

According to a report this morning in The New York Times, banks and other lenders including Fannie Mae and Freddie Mac hold 872,000 homes and are in the process of seizing a million more homes from troubled borrowers. At current rates it will take lenders more than three years to sell those homes. This includes homes held by lenders and homes in the foreclosure process. It's the dreaded shadow inventory, and its casting a big shadow on all the other active listings.

I'm working with a nationwide real estate marketing and technology company, Tranzon, that is successfully taking on these market challenges by offering Lenders a wide variety of strategic solutions to get through the distress sales processs. This is true no matter where they are in the process from orchestrating a consensual short sale, implementing a foreclosure auction, or managing a REO portfolio phase out. At most foreclosure auctions, you can almost guarentee the lender taking title. Tranzon's high impact marketing goes significantly beyond the statutory legal requirements and assures that serious buyers will know about the sale, minimizing the all-too-common transition from non-accrual to REO.

My team aren't superheros, we're problem solvers. We've got our sleeves rolled up and we're out there finding individual solutions for the challenging foreclosure and REO inventory in markets all over the country. If you are working with distress property you have options. Get in touch with us, we've got solutions for lenders and other serious sellers of real estate.

How did you get into the real estate auction business?

I get this question a lot. Maybe its because I'm not the person they have in mind when they think of real estate auctions.

I started in the auction business, specifically personal property auctions, think "Antiques Roadshow". Its true, I know a lot about paintings, silver, porcelain and furniture. From 2004 - 2009 I worked for two different Auction Houses in Maryland, and I had a great time. Both of these auction houses had a real estate division, and the type of property they sold the most was Estate Sales.

I accidentally started selling real estate at auction in 2006 for a DC area auction house. One of my first clients was a women who hired me to help her downsize before she retired to Florida. She consigned Native American Artwork, Victorian Jewelry, and Vintage Fur Coats. The appointment went so well she asked me if I could help her sell 40 acres of land she inherited in Virginia. She had been trying to sell it for three years, and thought an auction might be a good way to go. The rest as they say is "history".

Once I started booking real estate auctions, I got hooked. They are really exciting, I think of them as the "sport" of the real estate industry.

After a while I realized that selling real estate at auction was more fun than selling truckloads of antiques. Don't get me wrong, there are some great moments and a lot of beautiful things, however, I personally don't want to handle another dusty Hummel collection or cow painting anytime soon - not when I could be selling real estate.

People who work at auction houses are known as "specialists" - great title, right? I've now got a career as a residential real estate auction specialist. I'm glad to be in a niche segment of the market, and I love what I do. Its not an easy segment of the industry to break into. For me it is all about referrals. Most people don't think about selling their property at auction, but that is changing. The auction method of sale is not right for every property, but when it is a good match, it's a highly effective way to do business.

Now, if you'll excuse me, it's Monday night...time for a little Antiques Roadshow.

How to Buy Real Estate at Auction

For the uninitiated, the prospect of purchasing real estate at auction can be daunting. So you’ve seen an advertised auction property and you’d like to take a closer look? Here are some best practices for pursuing real estate at auction.

· Engage the auction firm. The majority of our inquiries come from consumers and real estate professionals that have little or no experience with real estate auctions. We are glad that you are interested in the auction, and want to provide you with as much information as possible.

· Identify the auction terms, read them carefully, and note any and all questions you may have. There are many different types of auctions so do not make assumptions based on previous experiences. Note what is required to participate in the auction. In most cases you will need to bring certified funds to the auction to bid on the property.

· Be aware of Agency. The auction firm represents the Seller. You have the option of being represented by your own agent, typically at no additional cost to you. Your agent can help guide you through the process and will attend the auction with you.

· Perform your due diligence. If inspection and appraisal reports are not already available, in most cases, and at your own expense, you can have the property inspected or appraised for informational purposes prior to the auction. This is not a requirement, but if you are seriously considering purchasing a property this is a good step to take to ensure you feel fully informed prior to the auction. Real estate is sold at auction “as is” however, the auction firm is required to disclose pertinent information to prospective buyers.

· Create your own strategy. What is your budget? You budget should include the high bid, the buyer’s premium, as well as your estimated closing costs. The “high bid” is a term used to describe the final bid at the auction. The buyer’s premium is a fee that added to the high bid to create the contract price. Have a financing plan; most auctions require a settlement period of 30-45 days. In the case of a foreclosure or a bankruptcy auction, your contract may require court approval prior to entering the settlement period.

· Pre-auction offers: People who do not have a lot of experience with the auction format often conclude that they would prefer to make a pre-auction offer, usually under advisement from their own agent who may be unfamiliar with the advantages of the auction process. From the auction sellers prospective, a pre-auction offer needs to be significant to warrant the cancellation of the auction. If you conclude that you like the property at the “right price” the best way to participate is by attending the auction.

· After you’ve won the auction: During the settlement period you may have access to the property to finalize your purchase. Should you encounter a condition issue that you need to remedy prior to settlement (sometimes this may be a condition of your loan) it is not uncommon for auction buyers to do this at their own expense. It is important to be cognizant of the fact that your auction deposit is binding. Should you fail to proceed with the purchase, the deposit will not be refunded. Auction contracts do not have contingencies. The auction method of sale does not uniformly work for every buyer.

· Have fun: Nobody can predict with certainty what’s going to happen at the auction. This creates a sense of excitement for all of the participants, including the auction firm. Don’t be the person who hears about the result the next day and wishes they had been there to get a fantastic purchase price. Once the auctioneer drops the hammer and declares the winner, the bidding is closed. As they say at The Maryland Lottery, “you gotta be in it to win it”.

Auctions are public sales. You are welcome to attend the auction to “just watch”. Registering as a potential buyer is not an obligation to bid. While many auctions are indeed court ordered, more and more private sellers are electing to sell their real estate at auction as part of a calculated strategy. Additional information about real estate auctions can be found through the National Auctioneers Association, the National Association of Realtors Auction Program, or by consulting one of the many qualified auction professionals in your community. The next time you see an auction listing consider taking a closer look, you just might mind find the deal you’ve been waiting for.