Local housing auction draws thousands, but few find bargains

FORT LAUDERDALE, Fla. -- July 31, 2006 -- Wanda Brown has been trying to buy a house for some time, but without success.

When she saw an advertisement for the Great South Florida Real Estate Auction on Saturday, the Plantation resident rushed over to the Broward County Convention Center to take her chances. She brought along a $2,500 registration and bidding fee and quickly set her sights on a three-bedroom, two-bath single family home in the Breezeswept Park Estates in Plantation.

A few others among the 2,000 who filled the Floridian ballroom also liked the property. The winning bid was $292,000.

"That's overpriced," said Brown, 48, a school board maintenance employee. "I know the houses in that area. It's a nice area, but it's no $300,000 house."

Many potential homebuyers, Realtors and speculators who attended the daylong auction of almost 100 properties shared Brown's feelings. Some were also taken aback by the "as-is" contract terms they received in their registration packages.

But to Ben Stern, whose Synergy Group real estate firm owned the properties, the turnout meant South Florida's housing market remains in a slump since sellers set prices high and buyers wait for those prices to be reduced. "It tells me that the market is ready for this," Stern said.

Residential home auctions are becoming popular with sellers nationwide, as properties are taking longer to sell than in previous years. Public auctions generated more than $14 billion in sales in 2005, according to the National Auctioneers Association. Such auctions accounted for 6 percent of all U.S. real estate sales in 2004 and are expected to grow to 30 percent by 2010.

Potential homebuyers hear the word auction and think "steals." Many are left disappointed.

"The prices are what you would pay at market prices," said Mary Parks, a Hallandale Beach speculator. "I expected better bargaining, and this is not. These aren't bargains."

The beginning bids, which some considered high, immediately forced the properties out of many attendees' budgets.

Laurel Walters, of Boynton Beach, was among those who got their $2,500 registration fee back after considering the other fees the winning bidders would have to pay; closing costs, a 10 percent premium added to the winning bid and other contingencies put the properties out of range immediately.

"Here, people got carried away," Walters, 35, said. "This is for somebody who can absorb a great amount of risk."

Stern said the lowest winning bid was $86,000 for a Lake Worth house. The highest bid was about $600,000, for a Tamarac house.

Merly Grigou and her mother, of Plantation, were among the purchasers. Upon obtaining financing within one month, they are set to walk away with a six-unit Fort Lauderdale apartment building on which they bid $522,000.

"Everybody's trying to buy a piece of property now, so why not?" Grigou, 24, said. "Some of the prices a little bit high. [But] this is a good start for anybody looking for something to invest in."

Copyright © 2006, South Florida Sun-Sentinel, Macollvie Jean-Francois, with research by Bill Lucey. Distributed by McClatchy-Tribune Business News.