Bidders find right price on homes

RALEIGH -- A blur of fast talking and price slashing Sunday pushed about 50 North Carolina homes off the market in a spectacle spawned by the national foreclosure crisis.

A national company's first Raleigh auction of foreclosed homes drew about 200 bidders and onlookers to the Raleigh Convention Center, many of whom had never been to an auction, much less placed a bid.

They were lured by the prospect of buying a home to live or invest in at less than half of its asking price. But they also fought the jitters as some of the largest investments they will ever make were decided in a few minutes of frenzied hand-waving and the arcane cadences of the auctioneer's cry for higher bids.

"It would have been better if it were just slower," said Karen Jones. She said she was shaking as she bid on the Greenville home she bought for $105,000.

The auction, held by a California company called Real Estate Disposition Corp., had more in common with a dignified fine art auction at Christie's than with the state's celebrated tobacco auctions, though the tenor was light-hearted. Attendants in tuxedos worked the room helping bidders, and a young, slight auctioneer took an occasional sidestep from his high-dollar spiel to pitch the virtues of a certain property.

"I can hear the sea gulls," he said of one beachfront home.

To help first-time bidders, a mock auction of the Durham Bulls minor league baseball team was held before the actual bidding began.

Dave Lee, vice president of the auction company, urged bidders to take advantage of a convergence of factors: a high number of foreclosures, low interest rates and motivated sellers.

"You are at the right place at the right time, and you're buying property for the right price," he said as he opened bidding.

His company bills itself as the largest auctioneer of foreclosed homes in the world. It has done a booming business amid the national rise in home foreclosures, including more than 25,000 homes auctioned so far this year.

In North Carolina, foreclosure filings were made on nearly 3,000 homes last month, according to RealtyTrac, which monitors foreclosures by state.

That number hit 4,600 homes in August, up 32 percent from the same period last year.

Since then, a state law limiting foreclosures has slowed the bleeding. But the real estate market locally has not fully recovered, with slowing sales creating a glut of homes for sale.

Jones and her husband had been looking for bargains among foreclosed homes and had been eyeing the one they bought for months. When it came time to bid, they took the advice of their 8-year-old son, who cautioned them not to bid too early.

Julie Wills and her husband had also hoped to find a bargain -- on a three-bedroom house in Fuquay-Varina. She had visited the 2,800-square-foot home, noting its custom features such as a storage closet for the playroom and built-in shoe racks.

"It's making my heart race," she said before the bidding began.

She walked out of the room, nearly in tears, as it sold for more than they could pay.

Lining the back of the room were potential investors doing their homework for future auctions. One of them, Robert Johnson of Raleigh, lost half of his retirement fund in the stock market.

"I'm looking for something so I can recapture some of what I lost," he said.

Eva Summer recently moved to Durham from New York, and she would like to buy a home at auction. She figured she should watch one before hopping into the bidding.

Plus, she said, there's no reason to hurry.

"It's getting worse and worse," she said of the real estate market. "It's not getting better."

Some homes hit the block more than once as the first winning bidders saw their financing fall through. Even some of the buyers who clear financing hurdles may see their winning bid rejected by the banks that hold the homes.

Sarah Sonke, whose Raleigh-based company auctions homes, suspects that some of the best bargains will be rejected.

"A lot of these banks just aren't ready to flush," she said, using a toilet metaphor for ridding a balance sheet of bad investments.

Lee, the vice president, said about 80 percent of the winning bids that require the approval of the seller will get it. The rest might see yet another round on the auction block.