Wealthy turn to auctions as mansions go unsold for years

I was reading the article and it sort of reminds of foreclosure auctioning without the Notice of Trustee Sale.  It's homeowners that have to sell their multi-million dollar properties.

David Sandwith has been trying to unload his seven-bedroom house on Mercer Island, Washington, since 2009, listing it first for $32 million, then cutting the price to $28.8 million last year. After not receiving any acceptable offers, he's putting it up for auction.

“I have a growing family and I have opportunities that I want to pursue in my life, and that doesn't necessarily mean that I will be located here in the greater Northwest,” Sandwith, 41, said in a telephone interview. “The time is right for us to sell the home.”

Real estate auctions, long used in the sale of foreclosed properties, are becoming more popular among wealthy homeowners to drum up interest for mansions that have languished on the market after the housing crash. In exchange for a quicker sale, many sellers are accepting price cuts of 50 percent or more.

 Half Off

Jack Gerlach, who sold his Malibu home in an auction conducted by Premiere Estates last year after it had been sitting on the market since 2008, got $2.6 million for it -- less than half the original listing price of $5.5 million.

“During those two years my house was on the market, I was in a way at a standstill,” he said. “To use the auction process was a decision to move forward.”

Gerlach, 32, a residential real estate developer, is in the process of building a 10,000-square-foot Mediterranean home in Malibu for his wife and himself. To move ahead with the “dream project,” which he's planned for six years, as well as two investment properties he's developing in the Hollywood Hills, he wanted to unload his loft-style house, which has floor-to- ceiling windows.

Look at some of these list versus sale prices.

At Premiere, a Malibu home originally listed for $8.4 million in September 2008 and cut to $6.9 million by December 2010, sold for $5.2 million in an auction this April. An estate in Corona del Mar, California, was priced at $19 million in October of last year, reduced to $12.9 million in January and sold for $7.5 million in April. A mansion in La Jolla, California, was listed for $15 million in February 2009, lowered to $12.9 million in September 2010 and auctioned for $8 million in December.

Example or Testimonial 

He had listed the five-bedroom, seven-bathroom property -- which he bought in 1994 for $1.52 million and subsequently rebuilt -- in May of last year for $12.5 million. This June, after six weeks of promoting the auction and showing the house to potential bidders, it sold through New York-based Concierge Auctions for $8 million, the low end of a range that extended to as much as $10 million the company had suggested. Osinski had a $5 million loan on the property.

“The market has changed,” he said. “I asked too much, as we all do. I hung on for a long time. But this is it. It's time to move on.

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