Auction Company Thrives in Economic Downturn
By Gretchen Mae Stone
The State Journal
CHARLESTON—In today’s real estate market, some properties go unsold for a year or more. Red Hawk Auction & Realty meanwhile has brought reluctant buyers to the table and thrived as traditional sales stagnate nationwide.
The Lewisburg company sells properties using the auction method of marketing, in addition to traditional real estate sales.
Owner Bill Hoover makes publicizing the company and its properties among buyers a priority.
Hoover, speaking May 18 from a National Auctioneer’s Association’s Real Estate Summit in Georgia, said auctions work better than traditional real estate sales because they bring together buyers and sellers in one place at one time.
Hoover points to a recent auction where his company sold 981 acres in Clay County for almost $1.2 million. The transaction took 30 minutes.
In that case, the marketing campaign lasted just 45 days.
The direct marketing campaign for the property led 4,093 visitors to Red Hawk’s website.
“We produce somewhere around 7.7 million unique visitors to the website every month,” Hoover said.
Hoover received inquiries on the Clay County property from 45 states and 51 countries. Inquiries came from people as far as Europe and Riyadh, Saudi Arabia, and from local prospects as well.
In Red Hawk’s first six months in business it sold more than $5 million in property. The company is on track to sell more than $25 million in property at auction this year.
Hoover opined the economic recession hobbling the real estate industry will last longer than recent predictions. He based that on information he’s heard during numerous educational seminars he attends.
Because of the recession, property owners selling land and homes opt for auctions for the time value of money, he said.
“What better way to sell a piece of property than have a ballroom filled with 20 to 850 buyers in a competitive bid?” he said.
Hoover prefers the term “auction method of marketing” to auction because historically they had a bad reputation.
The word auction over the years has put a sour taste in people’s mouths, he said, because auctions usually meant foreclosures sold on the courthouse steps. But today they’re just one of several ways real estate companies sell property.
Some properties still go up for sale on those same courthouse steps, Hoover said, but with marketing show greater profits.
He said a recent sale garnered five times the dollar amount the seller expected, because marketing consisted of more than a legal advertisement in newspapers.
Most auctioneers at the Georgia summit belong to the MarkNet Alliance, a national network of 37 auction companies who coordinate marketing.
Last year, companies in the alliance sold more than $198 million of real estate at auction in 26 states.
When one of Hoover’s customers wants beachfront property that he doesn’t have available, they can access other alliance members’ websites from his website.
And other members’ customers can access Hoover’s properties the same way.
Red Hawk’s success has come in part from sophisticated web-based technology that allows the business to determine which buyers are interested in a property, Hoover said. He can pinpoint buyers who want, for example, readily available horseback riding or camping.
Red Hawk narrows the buying field with its technology and then sends out mass e-mails to 250,000 people for each auction.
“We have the ability to market, in my opinion, better than anyone else,” he said. “Our computer software allows us to spend investment dollars in marketing we know are not wasted.”
Hoover has run campaigns that cost from $2,000 up to $50,000. He said a colleague recently sold an $8 million property after a $200,000 marketing campaign.
Thirty-day closings without the contingencies found in traditional real estate sales are another positive auctions offer, he said.
“In today’s market, an educated seller uses the auction method of marketing as a first choice when selling their real estate rather than as a last resort,” Hoover said.
Red Hawk takes several property types to auction, including farms, timberlands, residential homes, industrial and commercial properties, natural resources, equipment and machinery, livestock and other tangible assets.
Red Hawk Auction & Realty serves the West Virginia, Virginia, Ohio, and Metro Washington, D.C., areas, and has offices in Lewisburg, WV and Bland, VA.
