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Feedback mixed on eBay real estate auctions

For two years, real estate agents have had no luck finding a buyer for the 3,800-square-foot home David Frishman built as an investment on Bradenton's exclusive Hawk Island. Now, stuck with $12,000 monthly payments, Frishman is trying to sell the house in a less conventional way — he has put it up for bid on eBay. With a day left to go, the responses have been disappointing. "Most are just sort of predatorial,'' says Frishman, who has heard from people wanting him to refinance or take less than his $1.5-million starting bid. "We probably wouldn't say it's been a viable method.''

Kerry Hann, a financial representative for an insurance company, holds a more positive view of eBay. The listing for her $645,000 golf course home in the Sarasota County town of North Port has drawn serious interest from a prospective buyer moving to the area from California.

"The exposure you get on eBay is priceless,'' Hann says.

• • •

With some 84-million active users worldwide, the online auction site eBay has long been a favored venue for buying and selling easily shippable items like iPods, Nikes and Beanie Babies. But the comatose real estate market in many parts of the United States has also made it an option for those trying to unload houses and other real property.

As of Sunday, eBay's real estate category had 4,029 listings, a tiny but growing number of the site's 17-million listings. Among the properties offered for sale were 348 in Florida, including:

• A five-bedroom canal-front home in the MiraBay development of southern Hillsborough County. Bought for $695,000 in 2005 at the peak of the boom, it was foreclosed by the lender and is now listed for $399,999.

• A two-story, lakefront home in the Lee County town of Estero for $265,000. The owners, who paid $346,800 for the house in 2005, need to sell because they have another place in foreclosure proceedings.

• A 10-acre horse farm and boarding stable in the heart of urbanized Pinellas County with house, pond, riding arena and barns. Starting bid: $3-million.

Holly Rice, whose family owns the farm outright, says she based the price on what developers offered before the market collapsed.

"This is a very unique piece, and eBay seems to do a lot of specialty stuff,'' she says. "It covers the whole country, and for the kind of money you spend, more people go on eBay than ever open a magazine.''

• • •

For $150 for a 30-day listing or $300 for a 90-day listing, real estate sellers have two options: They can buy an ad in which they specify a fixed price or do an auction with a starting bid. Unlike most eBay transactions, no money changes hands at the immediate end of the auction. Instead, as a required disclaimer says, the winner is "expressing serious interest in the property and in pursuing contract discussions'' with the owner.

Given that real estate laws vary by state and that transactions are often complicated by title, lien and other issues, buying property through eBay can be chancy.

"I just think people are concerned about how real it is,'' says Angela Cegnar, a Bradenton real estate agent. Cegnar's daughter tried to sell her Maryland home on eBay with no luck but plenty of skepticism from prospective bidders.

"She did get calls, but it was people saying, 'Is that what it really seems to be?,' " Cegnar says. "You're not sure who you're dealing with.''

Matt Burnett, a real estate agent in Cape Coral, acknowledges that "a lot of things have to be negotiated'' after the auction ends. But he has still managed to sell a few houses to people who first saw them on eBay.

"Florida is the kind of place where you get a lot of buyers from out of state,'' says Burnett, who now hopes to find someone to take over a pool home from owners desperate to sell.

• • •

Despite Burnett's success, a look at recently ended auctions shows that most sellers don't have any more luck on eBay than they apparently had elsewhere. Many houses fetched multiple bids, though none over the "reserve,'' or lowest price the seller was willing to accept.

Typical was the experience of a couple who listed a three-bedroom canal-front house in New Port Richey's Gulf Harbors area. They got 30 bids, the highest at $160,100 and a query about trading for a log cabin "nestled in the hills of Kentucky.''

But none of the bids met the reserve price on the house, which has a $370,000 market value.

In Bradenton, the Frishmans turned to eBay as a last resort after failing to find a buyer for the house they and some relatives built as an investment at the tail end of the real estate boom.

"We thought we could see the bubble coming for lower-end houses so we decided the best option was to go with waterfront property in an exclusive neighborhood,'' says Frishman, who owns a chain of dry cleaners.

But a confluence of factors doomed their hopes of profit. There were problems with the builders, the relatives were unable to make their share of the payments and the local real estate market tanked. Now the Frishmans could lose their own 4,000-square-foot home in Lakewood Ranch, which they put up as collateral for the loans.

At a starting bid of $1.5-million, the assessed value, the Hawk Island house would seem a great deal in a new gated community where some lots alone are listed at the same price. But while the auction has drawn 3,804 views, not one bid had come in as of Sunday.

"We're just trying anything at this point,'' Frishman says of his eBay auction, which ends today. "It certainly wouldn't be our first option, but when you're trying to save your home, you don't leave any option unturned.''

Susan Taylor Martin can be contacted at susan@sptimes.com.

Feedback mixed on eBay real estate auctions 07/27/08 [Last modified: Wednesday, July 30, 2008 10:59am]

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