Before You Bid

摘要

Ferrari, an entrepreneur who owns companies in Tennessee and Illinois, wanted a bigger house for his growing family. So hi attended an auction of country singer Bar-Mandrell's 27,000-square-foot log house in Nashville, Tenn. He bowed out when the bidding passed his self-imposed limit of $2 million (it sold for $2.1 million). Next, in Franklin, Tenn., he bid on a 13,000 square-foot replica of former President Andrew Jackson's home. This time, his $1.5 million was the winning bid. "You have to set a limit," says Ferrari. "A lot of people who attend auctions get whipped into a frenzy. The key is to make sure you don't get too emotionally invested." Real estate auctions are on the rise: Sales exceeded $60 billion in 2002, up from $10 billion in 1980, according to consultants Gwent Group in Bloomington, Ind. That takes them to less than 3% of total real estate sales. From the seller's perspective, auction is best suited to homes that are hard to value. These include estate sales, waterfront homes, ranches and homes with historical significance, such as the Andrew Jackson replica that Ferrari bought. "Half the homes we auction have never been on the market before," says Craig King, president of J. P. King, one of the oldest real estate auction firms in the U.S.