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VOL. 36 | NO. 24 | Friday, June 15, 2012

Midstate still ‘sold!’ on allure of auctions

Internet bidding can’t match face-to-face battles

By Hollie Deese

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Tommy Anderson always knew he would be an auctioneer. His father, Clive Anderson Jr., was an auctioneer, as was his grandfather, Clive Sr. The family has been in the business since 1947, and the number printed on Clive Sr.’s state license is “1.”

“I just love the industry,” says Anderson, who is a broker and auctioneer with Prudential Woodmont Realty. “It is just exciting.”

That excitement has been a constant through the years. Anderson’s family has been successful, in part, because of the thrill of the event. But some credit has to be given to the fact that in the Midstate, auctions are a long-accepted way to do business.

“Middle Tennessee has always been an auction area,” Anderson says.

Bobby Colson, whose brother Billy worked for the Andersons until 1976 before starting Bill Colson Auction and Realty, agrees.

“Middle Tennessee has always been a hotbed for successful auctioneers compared to other parts of the country,” Colson says. “There is just a segment of people that this is the way they buy and sell. And thank goodness they do.”

Despite common misconceptions, many auctions have nothing to do with getting someone out of trouble. Even the National Association of Realtors promotes auctions as a great way to sell property, but only if a property will only appeal to a wide market.

Dwight O’Neal of Realty Trust Auctions agrees with the first part of the NAR’s stance, but disagrees with the second.

His focus is commercial and high-end real estate, and it is because he is appealing to such a narrow niche of buyers that he knows he will be successful.

O’Neal’s firm auctions properties for which buyers don’t come to the table unless they have the ability to lay out $700,000 or much more (think $20 million). His company, which doesn’t sell distressed or bank-owned properties, did $16 million in sales last year.

Not willing to leave finding buyers to chance, O’Neal utilizes an intensive marketing strategy to find the right bidders for each listing.

“We are quite different from the average company,” O’Neal says. “We have a true marketing program for each and every property. We don’t take the old shotgun effect that most real estate companies take, where they list the property, assign it an MLS and put a sign in the yard. Maybe they rotate you into their advertising in the classified section of the Sunday Tennessean and hope to God that another broker shows up with a buyer for your property. That is not our game plan.”

Scott Chaffin of Prudential Woodmont Realty takes bids during a recent auction of a home and property in Antioch.

-- Photo: Lyle Graves | Nashville Ledger

Instead, they make the assumption that the right buyer is out there and will be found.

“First and foremost, you have to be able to afford it,” he says. “If I am selling a million-dollar house, there is no need to market to those who can’t afford to buy a million-dollar house.”

From there, they analyze each property and narrow the demographic even further to determine the target buyer. High-end condo downtown? Possibly a professional in the 25-40 age range. Gated golf community? Maybe a young family on the rise.

Once they determine the group, they determine the best way to reach them. Those condo buyers might get a text about an upcoming auction, with the family getting a direct-mail piece.

“It is all about a marketing program that fits what they need and want,” he says. “And what they want when they put their house up for sale, is somebody to market to the people who can afford to buy it and want to buy. That is what we do.”

Colson takes a wider approach. In business for more than 40 years, his company handles everything from antique furniture and cars to distressed real estate. And when it comes to marketing, all avenues are sought to get the word out.

“You should have a little bit of it all,” he says, adding he’ll use the classified section of local newspapers and the Internet, as well as signs and billboards.

“Signs are still a big, big part of our business, which I think sometimes get overlooked,” he says.

He also maintains an extensive email list and sends blasts when needed to drive interest for an auction.

“There is no cookie-cutter thing that is going to work on everything. You have to have a little bit of all of it,” he says.

No matter how they get the people there, auctioneers agree it is the buzz of excitement upon arrival that gets people bidding. There is a sense of validation that comes with knowing there are other people there who want what you want and might even be willing to pay more for it. You get to see them face to face, and you want to beat them.

“We have taken all of the potential buyers and put them in one location, rather than putting your house in a pile for all of those people to dig though,” O’Neal says. “They are ready to buy today, and you are ready to sell today. Everyone knows exactly what is going on and there is a time limit for that to happen.

Tommy Anderson tries to spark interest among any Trekkies in the audience with a assistance from Jack Tea. The Star Trek album was one of many records in a box that was sold as one item.

-- Photo: Lyle Graves | Nashville Ledger

“The auction platform creates a sense of urgency, and with bidding and competing comes validation. When you are bidding on a property and wondering if it is worth a million dollars, and there is somebody right behind you who bid $990,000, that validates your question. Of course it is.”

Earlier this month, he sold Rocky Van Shelton’s 4,200-square-foot home and 148-acre farm at auction for $671,000, well below its 2007 appraisal of $1.2 million. Shelton owned the property outright, but was moving to Virginia and this was his last property tie to the area.

“He could have chosen anyone in the world he wanted to sell it,” O’Neal says. “He chose us because he thought we had the most aggressive marketing program out there and the auction platform would produce competition, which in turn would get us the highest price in today’s market. In any market, good market or bad market, that is the way it works.”

On the other hand, a few months ago he sold a property in Oak Hill at auction to Titan Rob Bironas. The No. 2 scorer in the history of the Titans/Oilers franchise came to the auction hoping to scoop up the gate-community property for $800,000, but paid $1.2 million instead.

“They wanted to buy it and they wanted a bargain, but they knew what the market value was,” O’Neal says. “When they got there, 40 people were there, eight of them bidding. So they had to compete to get it.”

It is because of that competition that O’Neal does not do online bidding.

But online is exactly where Will McLemore positioned himself when he started McLemore Auctions in 2006. The one-time Sotheby’s auctioneer saw a need for online auctions in his hometown of Nashville. Last year his business handled 51 auctions with total gross sales of more than $6.2 million.

“When we started out, our first auction was Internet only, which is unusual,” he says. “Most of our competitors have a long heritage of doing live auctions, so it was important for us to be able to do online because we were competing against more established companies.

“And the auction business is undergoing a lot of transition now. The Internet and the way of interacting with bidders through the Internet have really turned the business upside down. And although there are traditional auctioneers are out there selling a lot of goods every day, and many who are successful who will continue to be successful, the Internet has made it easy to communicate what a buyer has to sell in ways that have never been possible before, and that a really exciting process.”

McLemore also banks on the fact they operate with a highest-bidder-wins model. That means no minimum bid and no reserve bid.

Anderson is moving more into online sales, and has even partnered with McLemore recently in order to do that. Collaborations are made easier by the tight-knit nature of the Midstate auction community.

“Especially Middle Tennessee guys, we collaborate with each other,” Anderson says. “We have friendly competition.”

Colson admits there is value in online sales, and will do more of them in the future. But after 32 years as an auctioneer, he still loves live events.

“There is a place for everything,” he says. “But I think people still like to come out and touch and hold stuff. For me, it is hard to generate the excitement of a live auction online.”

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