Two very different types of North Jersey properties — condos in Rutherford and a 34-acre gentleman’s farm in Morris County — are to be auctioned next month, reflecting the growing popularity of auctions in a tough real estate market.
Auctions are a way for sellers to “create velocity of sales,” in the words of Jeff Hubbard, an executive with the real estate auction company Sheldon Good & Co. And they help both buyers and sellers determine a property’s true value: “When the gavel goes down, that’s going to be what the property is worth,” said Concierge Auctions CEO George Graham.
About $17.1 billion in real estate was auctioned in 2008, up 48 percent from 2003, according to the National Auctioneers Association. In a slow market, auctions “force buyers to be decisive,” said Chris Longly, a spokesman for the auctioneers’ group.
Sheldon Good is auctioning 20 new Rutherford condos Nov. 20, with suggested opening bids of $145,000 for one-bedroom units and $175,000 for two-bedrooms — a discount of more than 60 percent off their original asking prices of $369,000 to $559,000. Eight of the units are to be sold with no minimum price; the others will be subject to a reserve, or minimum, price.
The condos, which range from 680 to 1,090 square feet, have granite countertops, stainless-steel appliances, hardwood floors and balconies. Some are already rented, and buyers of those units would have to honor the tenants’ leases, Hubbard said.
The five-story building, called The Gate, is in a neighborhood sandwiched between Route 17 and Rutherford’s downtown commuter train station. The area is a jumble of single-family homes and businesses, with a towing company, a dry cleaner and several fast-food restaurants.
This will be the second condo auction in South Bergen within the past year. Last November, Sheldon Good auctioned 26 condos in nearby East Rutherford, selling them for around $280,000 each — well below their original asking price of more than $450,000.
For developers, auctioning off properties quickly, even at a lower price, can be better than paying property taxes, utilities, loan interest and other costs for months while waiting for a buyer, Hubbard said.
The Morris County property, Fawn Hill Farm in Harding Township, includes a 70-year-old stone colonial mansion, modeled on Mount Vernon. Built in 1940 by Allan Kirby, president of the Alleghany Corp., the house was bought in the early 1980s by Herb Glatt, founder of Magla Products, a Morristown company that makes work, medical and gardening gloves.
Glatt, 82, and his wife, Gloria, who’s in her late 70s, raised four children on the property. Though it’s just a couple of miles from Morristown and Route 287, it was a working farm, with an apple orchard, cows, horses, donkeys, goats and chickens.
“It was like Noah’s Ark,” recalled Glatt. The location, he said, is unusual: “You’re in the country, but you have all the conveniences.”
The Glatts decided to sell because they spend most of their time in their Manhattan apartment. “It’s time to move on and let someone else enjoy it,” Glatt said.
They started out asking $22.5 million, cutting the price as the market slid. It hasn’t sold at its current price of $15.25 million, so the Glatts decided on the auction.
The house includes seven fireplaces, an elevator, a bowling lane, a pool, caretaker’s house, guest house, two garages and stables. Earlier this year, it was featured as a designer show house in a fund-raiser for Morristown Memorial Hospital.
Fawn Hill is being auctioned by New York-based Concierge Auctions in three parcels, with no minimum payment. In many auctions, the seller sets a reserve, but Concierge CEO George Graham said he advises against that, because potential bidders will be less motivated if they think there’s a chance the property won’t actually be auctioned.
Graham says his company, which specializes in luxury properties, started the year doing about two auctions a month and is now doing five or six. It’s also getting ready to auction a mansion in Tuxedo Park, N.Y., and a lakefront home in Weston, Conn.
Sellers who turn to auctions usually have had their properties on the market for long periods, he said.
“These are people who have tried a regular brokerage and realize that’s not going to get them where they need to go,” he said. Wendy Lucas and Michael Russo of Concierge said the property has drawn interest from entrepreneurs and Wall Street professionals, including some who already live in Morris County.
Lucas called auctions a good choice for sellers “who want their homes sold in a certain time frame and want to saturate the market and get the word out.”
The Glatts have asked the town for permission to subdivide the property into six lots. Whoever buys the land will have to decide whether to move forward with that request, Lucas said.
The auction will take place at the property and will be open only to bidders who register in advance with Concierge Auctions.
