Sellers Of Luxury Homes In Md. Turning To Auctions
ANNAPOLIS, Md. (AP) — You probably wouldn’t find it unless you were looking for it.
The 13,400-square-foot mansion, complete with eight bedrooms, a guest cottage and a horse barn, sits on Round Bay in Severna Park. Dubbed the Swan Point House, it’s hidden behind a locked gate and a long, winding driveway.
Walk into the backyard, past the heated in-ground pool and multi-slip boat dock, and you’ll have what could be one of the best views on the Severn River.
Not surprisingly, this kind of luxury doesn’t come cheap, and that’s likely why the estate sat on the market off and on for five years.
The Annapolis plastic surgeon who owns the home originally listed the property for upward of $12 million, but had no takers, his realtor Warren Prins said.
So he dropped the price several times before finally turning to DeCaro Real Estate Auctions Inc., which put the estate on the auction block.
Auctioneer Daniel DeCaro said there are no minimum bids on the house, but the owner has agreed to sell it for at least $5.5 million. If the bids don’t reach that amount, he said, it’ll be up to the seller whether he wants to release it.
Hopeful buyers may place their bids at 11 a.m. Saturday at an auction at the home.
DeCaro and the Realtor working in tandem on the deal say it illustrates a growing trend. Hindered by a soft real estate market, high-end homes aren’t selling as quickly as they once did, or at all, and homeowners are turning to auctioneers to sell their houses to the highest bidder.
“Like everyone else, (the homeowner) is chasing the market down,” said DeCaro of DeCaro Real Estate Auctions, Inc., an Easton-based business that specializes in luxury real estate auctions. “He’s come to the conclusion that he has to take a more aggressive approach.”
The figures seem to back up his theory. According to Metropolitan Regional Information Systems, a real estate tracking company, there were 284 properties listed for sale in Anne Arundel County for at least $1 million between January and June.
So far, only 69 of those properties have sold. Another 105 listings were either withdrawn, or they expired unsold.
“A lot of people are looking for a new way to sell their real estate,” DeCaro said. “The old way isn’t working for them.”
DeCaro said in the last six months he’s gotten about 200 percent more calls from owners of luxury homes.
“We’re trying to erase the stereotype that these are distressed properties,” said Prins, a Realtor with Coldwell Banker in Annapolis and DeCaro’s auction liaison for the Baltimore-Washington area.
Swan Point’s owner, who asked to have his name withheld for privacy reasons, said he’d had the estate appraised several times. But that doesn’t mean much in this market, he said. So he turned to DeCaro.
Potential buyers seem to be curious about the mansion, which sits on 20 acres of land and boasts 1,600 feet of waterfront.
DeCaro and Prins have hosted open houses for the estate over the last few Saturdays, and said they get at least 100 people a weekend stopping by to take a look. A few visitors have come from neighboring states.
“That’s about 10 times more than what a normal house would get,” Prins said.
The same level of interest surrounded an all-glass house on the Magothy River in Pasadena. The four-story home, formerly owned by Merritt Athletic Clubs owner Leroy Merritt, was up for auction last month. The late business owner’s estate originally listed the property for $7.9 million, but had no offers. So it turned to Concierge Auctions.
Betsy Stettinius, the Realtor working with Concierge, said there was an interested buyer before the auction, and it was canceled. But Merritt’s estate wasn’t happy with the price the buyer was offering, and so the home was pulled off the market.
“That home didn’t have to sell,” Stettinius said. “But I still think (an auction) is a good process, if you have sellers that don’t necessarily have a bottom line. This is how they sell real estate in New Zealand and Australia.”
And it does seem to be growing in popularity here, she said.
“There’s no question about it — it definitely increases traffic,” Stettinius said.
At Annapolis Towne Centre at Parole, 25 luxury condos will be up for auction later this month.
The units in the GrandView are expected to sell for up to 70 percent off their original prices, according to the company handling the auctions. Ten are guaranteed to sell at or above minimum bids ranging from $220,000 to $325,000.
This isn’t the first time condos at the GrandView have been put up for auction. Last November, 33 condos were auctioned off; that set the tone for a post-auction sales blitz that moved another 30 units, said Mark Troen, chief operating officer of auctioneer Sheldon Good and Co.
“We did really well at the first auction,” Troen said. “So we thought, let’s see if we can’t succeed again. This is a great opportunity to help close out the inventory.”
The auction kicks off at noon on July 24 at the Westin Annapolis, complete with a band that’s meant to lend a fun vibe to the occasion — and help buyers feel comfortable enough to loosen their purse strings, Troen said.
Auctioning off the GrandView condos, built by Sturbridge Homes, became a necessity, Troen said.
“In 2009, the market died after we sold 45 units,” he said. “People were afraid.”
An auction, though, seems to boost their confidence.
“The price that they’re paying is the market price,” Troen said. “We’re not setting the price. The buyer is.”
As for the sellers?
“They like it because the units get sold,” he said.
Information from: The Capital of Annapolis, Md., http://www.hometownannapolis.com/
(Copyright 2011 by The Associated Press. All Rights Reserved.)