Over the past 60 days, NAI Global’s alliance partner for outcry auctions, Higgenbotham Auctioneers, has sold more than 90 properties at auction in Florida, Georgia, Louisiana, Texas, Delaware and throughout a number of Midwest states. In addition, they have scores of upcoming auctions scheduled before year end in Florida, Michigan, New Jersey, Illinois, Texas, South Carolina, and Georgia.

John Haney, General Manager, Higgenbotham Auctioneers, indicates that he is seeing more bank-owned properties being offered for auction. In fact, they’ve had more activity with bank-owned properties in the past 90 days than they’ve seen over the last few years.

They are seeing this nationwide, and not just in Florida where Higgenbotham is headquartered. However, in Florida, they are marketing a portfolio of 75 properties for a Florida-based bank to close by year end.

Haney is also seeing an uptick in overall activity at the auction sales. He attributes this to seller and buyer expectations becoming more aligned. In the past few years, there were few or no buyers for some properties and that is changing. During a recent auction for Wal-Mart Realty, there were between 8-10 active bidders for each property. About a year ago there may have been less than half as many bidders. In ballroom sales, where a year ago a crowd might consist of approximately 50 bidders, Higgenbotham now gets about 150 bidders. They are seeing more faces and good bidders. Sellers have finally become more realistic and have accepted current market values. They are no longer hoping for the prices they saw in 2007.

Haney indicates that sellers who also offer financing are likely to have a larger number of more serious bidders for their property(ies). He mentioned a large auction in Georgia that they are currently marketing. The seller is offering no-interest financing with a five year balloon. Buyers need to have a 20% down payment.

What does Haney forecast for the year ahead? He believes the trend that has started during the later part of 2010 will continue. He suggests that we’ll see an increase in the amount of actual transactions. Likely sellers will include sales from bankruptcy courts, banks and also from corporations that want to take advantage of the time value of money. They’re looking to take the money now and use it elsewhere in their operations. Haney counsels sellers to sell now if they have an alternative investment in mind – “what’s the difference in selling in November 2010 for $1M or waiting and selling in March 2011 for $1M? Take advantage of the time value of money and let your money work for you.”

-Patricia Faulkner

Patricia Faulkner is a Senior Vice President and auction specialist on NAI Global’s Special Asset Solutions team.