It sounds like a great way to work off our housing glut: Banks hire a nationally renowned auctioneer to dispose of hundreds of foreclosed homes at once from hotel ballrooms in Tampa.
And if you listen to the auctioneers, their sales success is stellar. Back in February, a company called Real Estate Disposition Corp. announced it had snagged bids for 131 of 176 homes on the block at the Grand Hyatt in Tampa.
I thought I'd check up on REDC this week to see how many of those foreclosure homes actually closed. After studying the results, I feel duped. And you should, too.
Leave aside the fact that REDC admitted later that only 75 homes actually sold on Feb. 7. When I plowed through the first part of the "sold" list and compared addresses against property appraiser records, I didn't find a single home that closed as of Thursday. Not one.
REDC's spokesman maintained this week that the company's auction success rate nationally is 80 percent. Suppress your laughter if you must.
I sat in on an auction in Tampa last year and was amazed how cheaply many properties sold. You hear about banks routinely ditching foreclosure homes for 60 cents on the dollar, but many of these were scarfed up for 30 cents. Turns out many never did sell. The banks either turned down the bid or the buyers had deceptively shallow pockets.
For enlightenment, I turned to Michael Peters, who runs American Heritage Real Estate Auctioneers in Clearwater. Self-interested though he is, Peters is critical of these assembly-line auctions.
According to Peters, there's no substitute for selling properties one at a time by enticing bidders to the actual home. But guess what: When buyers get to stroke the granite and flush the toilets, homes tend to sell better.
Like so much in real estate that's too good to be true, it appears mass auctions of foreclosure homes produce more weeds than deeds.