Recently two auctions were held at waterfront property on Lake Martin. A quick check with each of the auction companies revealed that neither homes sold for the reserved prices. Both remain unsold at post time.
Here’s the lowdown:
1. 284 Lakeview Drive - The “Waterfall House” at Willow Point - This auction was held on July 20, 2008. I wrote this post before the auction to spread the word. I haven’t talked to anyone that attended, but I spoke to a representative at Albert Burney Auction Company. He said that neither the lot nor the home met the reserved price that day and therefore did not sell at auction. He did say that both properties were available for sale in case anyone was still interested. If you (or someone you know and love) are, let me know.
2. 211 Farm Loop Road - Wind Creek Farms- This auction was held on July 26, 2008, by Deanco Auction Company. It had a published reserve price or minimum bid of $300,000. Apparently that amount was not met because a representative of the company confirmed that it also failed to sell at auction date. Again, if you’re still interested, let me know. I went through this home about a year ago (when owned by a previous family) and have tons of pictures.
These recent strikeouts remind me of last summer’s Lake Martin auctions. You may remember when another auction company had a big deal where they tried to auction 3 different waterfront homes on the same day. None sold. Contrast that with 2007’s auction at Harbor Pointe condos, where they sold about 20 units in one day.
So why are waterfront home auctions not catching on at Lake Martin? Is it:
A. The buyers are reluctant to pay the typical 10% auction commission on top of their bid price?
B. It is too much of a hassle to view the homes at the times appointed by the auctioneers?
C. Sellers are placing too high of reserve prices?
D. Local Realtors are digging defensive trenches around Lake Martin?
E. Buyers are unrepresented (by agents) and therefore uninformed of value?
F. Or a combination?
What do you think, dear reader? If anyone out there has some input, or would at least like to vote on my suggestions, please leave a comment below where it says “Leave A Reply.” If you can’t see that, hit the Continue button and then you should be able to see it.
I am really curious as to what others might think. As a “professional” (I know, eyes rolling) I might be missing something here, so let me hear some other opinions.
Related Posts:
Register Now For Auction At Willow Point
Results of Harbor Pointe Condo Auction
I feel that those going to an auction sale are the people that are looking for the “really great deal”. They are not finding any of those “steals” on lake Martin. Most of those that bought the home could afford the home to begin with. The ones’ that I have seen going for auction in our area, are those people that let realtors do the investing for them. That is the case of the house on Sturdivant Road. The realtor (**name edited**) purchased the house for his clients with a power of attorney. They bought 4 or 5 houses on the lake. I don’t know if they lost all or not.
Then there is the neighbor issue. The neighbor junked up their yard. This now discourages any buyers and he has more privacy for the time being.
Just an opinion.
Thanks, Dawn, for your opinion. Any others out there?
Speaking just from my own perspective…
From the summer before I was born through the summer of 2005 (46 summers) my family had the same cabin on the lake. It was our favorite vacation spot, our summertime getaway and, for several long (and significant) stretches of my life, it was my full-time residence. (Those cabins were NOT built for winter habitation, but love– even if it’s just the love of a place, not a person– can do a lot of warming.)
For most of my life, I would have paid ANYTHING for that cabin, on that lot. But since it was a Russell cabin, buying it was never an option.
In 1999 they started building The Ridge, and in 2005 we were told that we would be losing the cabin at the end of the summer. They offered us the first chance to buy the lot… and I declined. Now there is a house there, almost in the exact same spot that the cabin had stood… and I wouldn’t pay anything for it, wouldn’t place a bid if it came up for auction, and wouldn’t live there unless my life depended on it.
Why the change of heart? Because for me, the Lake Martin Experience has always been about more than a house on the water. The only lake experience I want will never involve paved roads, sidewalks, street lights, gated entrances, fancy landscaping, nearby golf courses, or the like.
Maybe that’s just me. Or maybe that’s NOT just me; maybe there are more who are realizing that a lot of what makes the perfect lake experience is being taken away, bit by bit, and they aren’t willing to pay an exorbitant amount for a less-than-perfect deal.
John,
The same thing happened here. The US forestry was auctioning 4 properties and got no offers. They put them back on the market a few months later at lower prices and all sold. I think all of your reasons applied where I am as well. Especially buyers wanting to Realtor assistance but them refusing to pay and the stringent money requirements. Maybe they’ll adjust prices and people can have another hack at it.
I think that people the majority of people attending auctions do so out of curiosity and are not serious about buying. Those who are seriously looking are wanting to find a great deal, i.e., that with a reserve price well below market price. I think that the sellers are usually going to set the reserve at the minimum they believe it will sell for if they listed it with a realtor.
My understanding of most auctions is that in addition to the commission, one also has to have the cash available to close the deal. Someone with that kind of cash is probably not looking for a home, but for a house as an investment.
I still think the best way to sell real estate is with a realtor who knows how to best market the house and reach potential buyers.
John, I have to agree with the perspective of B Jones. The developers have turned many areas of the lake into overpriced vacation destinations - the Ridge being a prime example. My thought is that most of those that really want to enjoy the lake are those with younger children who can do all the water activities. Personally, I don’t know too many young families that can afford a $1M for a second home unless they are a doctor or Daddy is paying. I would hate to see the lake turn into a retirement community because our parents are the only ones who can afford it.
Additionally, the older cabins are just overpriced. I understand that the price is what the market will bear. However, I think you will see prices drop significantly over the next few years or prices remain unchanged for many years to come.
So the reason for the no sales at these auctions is people are realizing that the homes are just not worth what the market is trying to get for them and the days of the McMansions are over - sorry Ridge.
Why no lake homes selling at auction? I think because they are not absolute and require relatively high minimums. I’ll bet the buyers are thinking that prices are still going down so there is not much motivation to go throught he auction process and expense when there are so many other choices. And there’s the financial-stress-hassle factors. There’s not enough reward for the risk.
The condo auctions had reference points as to value as well. Easy, perfect comps so you knew what a good deal was. Only problem there is you might catch a falling knife.
How tough is the market? Lake property is not the same of course but in the Atlanta suburbs new homes are selling for as low as $.50-$60 on the dollar and finished lots at $.40.
Thanks to everyone for the insight shared here. I tend to agree that if absolute, and advertised as absolute, you might see some sales that were close to market value. As to market value, I guess that you can study the market, but the decision to buy / not buy is always personal. It reminds me of what my dad said, around 1970, when they started selling waterfront lots for $9,000 at Willow Point: “what crazy fool would pay that much for a lot?” Oh well. 38 years later…
We attended the Waterfall House Auction. We were told there were not enough bidders so it was cancelled. The landscaping was beautiful but we felt that the house needed the drivit exterior replaced and needed a lot of updates inside to make it wonderful. There seemed to be a lot of humidity inside the lower levels of the house. A fresh coat of paint would have done it wonders. Also, no one was willing to tell us what the water situation was last summer. It was very hard to get straight answers to any of our questions out of the auction company. One representative said,”It is what it is”. They announced at the auction that the house had been sold to a private bidder so it is surprising to hear that it didn’t sell.
Great stuff, Mary.
These comments are so helpful. It’s shocking to me that there would be any sort of lack of information or communication on auction day. Wow. Thanks for your “on the scene” reporting.
Was anyone at the Farm Loop Road auction?
Or any other auction on Lake Martin, with a good or bad experience?