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How to Sell in a Flash: Hold an Auction

By Valerie Cotsalas
Staff Writer

LARRY KAGAN'S two-bedroom condominium in Plainview was bustling with activity last Sunday, a week after he sold it in a telephone auction to Chad and Michele Barnattan for $366,000.

The Barnattans had brought their parents along for a tour. They were taking measurements and discussing renovation plans.

Mr. Kagan sat on a sofa while his niece, Alyssa Kagan, 15, answered questions about the condo, where she had lived with her mother, Susan Kagan, and her grandmother until the elder Mrs. Kagan died last year.

Susan Kagan, sitting nearby, said she had been anxious about her brother's idea to sell the home on his own using a book, "How to Sell your Home in 5 Days" by Bill Effros, that he picked up two years ago.

"I thought he was nuts," Ms. Kagan said bluntly. "I never heard of anything like this. Everybody has a broker or has an open house."

Soon, Mr. Kagan was ordering auction signs from the book's affiliated Web site,
[www.GeorgeCappony.com], speaking to a consultant and buying bidding forms and brochure templates. A few days before the auction, he posted the signs along a two-mile stretch of Round Swamp Road and Old Country Road, pointing the way to the house with a red arrow (no phone number, no address).

In a two-day advertising blitz, Mr. Kagan placed ads in newspapers and posted fliers in supermarkets, libraries and hospitals and on Web sites. He removed his mother's antiques from the apartment, cleaned the rugs, painted the walls, rented furniture and put lilies and roses in vases. He put up signs inside the home describing its features and had handouts for bidders explaining the auction process.

In all, Mr. Kagan, who runs a payroll service, said he spent about $2,500 in carrying out the auction and put in "a solid week of work."

"It worked," Ms. Kagan said. "The response was incredible; like 200 people came up here."

Pearl Kamer, the chief economist of the Long Island Association, said more people are trying to sell their homes on their own to save on brokers' fees.

"For many people who are selling, particularly seniors who may have bought their homes a long time ago, the sale of their home is their nest egg," Ms. Kamer said, "and they're trying to make their nest egg as big as possible."

Mr. Kagan, 46, is a sturdy man with a salesman's smile, who likes to remind anyone who will listen that the auction is "a win-win." The seller doesn't have to pay a broker's fee and, as a result, the buyer gets "fair market value."

He sounds a lot like George Cappony, a former New Orleans real estate agent who runs the auction Web site and who advises homeowners on running their own auctions. For a fee.

Mr. Cappony's services range in price from $500 for signs and other products to $5,250 for full consulting fees.

"I don't talk to their customers and I don't sell their homes for them," Mr. Cappony said when reached by telephone. "I'm not an agent in every state."

To run the auction successfully "requires chutzpah," Mr. Cappony said, and "out-of-the-box thinkers" like Mr. Kagan.

It also requires a lot of telephone calls. When people visited the house, they entered their bid on a sign-up sheet on the refrigerator, Mr. Kagan said. Using the book's method, Mr. Kagan called all 74 bidders on the sheet beginning at 6 p.m. on Sunday. After the first round, there were seven people remaining. A bidder must top the high bid by at least $500 to stay in the auction.

After four rounds, there were three bidders left. Mr. Barnattan, 28, said that at first the phone calls he received at the couple's apartment in Great Neck were 40 minutes apart. Soon, they became more frequent. "I was starting to get anxious toward the end," Mr. Barnattan said. "I couldn't believe how far we'd come, and it was between me and one other person."

The Barnattans had saved their "killer bid" until the end, they said. When they neared their limit, they raised the bid by $2,000.

Meanwhile, Jeanine Venza, 31, was sitting by a phone at her parents' home in Plainview, awaiting another call from Mr. Kagan. She had bid $300,000 when she visited the property on Saturday. On Sunday, she raised the bid to $334,000 before the 6 o'clock deadline. In the auction's final moments, she had bid $364,000.

When Mr. Kagan called just after 10 p.m. to report that the "other bidder" had bid $2,000 more, Ms. Venza became suspicious. "I questioned myself about whether I was bidding against myself," Ms. Venza said, discussing the auction two weeks later. "I didn't know at that point; this is a person I met for what, 10 minutes?"

Worried that Mr. Kagan might be trying to push her bid up, she dropped out of the auction. Mr. Kagan called the Barnattans to tell them the other bidder had dropped out. The house was theirs. "I was stunned, stone-faced," Mr. Barnattan said. "It was like running a marathon."

For Ms. Venza, disappointment followed loss. "The next day I felt, 'Gee, maybe I should have bid higher,' " Ms. Venza said. "Now, at this point, I think I did the right thing."

A unit similar to Mr. Kagan's sold in December for $365,000, according to Christine Casa, the branch manager of the Century 21 Prevete real estate office in Plainview. Ms. Casa believes that, six months after that sale, Mr. Kagan could have gotten a higher price for the condo if a broker had sold it for him.

The broker fee for selling a condo in Mr. Kagan's development ranges from 4 percent to 6 percent, Ms. Casa said. For the money, she said, brokers screen people who see the house and guide sellers through the sale.

"With $2.50 for a gallon of gas, I'm not driving around with people who can't afford to buy the house," Ms. Casa said. "You're not opening your house to nosy neighbors."

But Mr. Kagan was satisfied with the price he received, considering that a 6 percent commission would have cost him $21,960. The Barnattans and Ms. Venza each said they had lost out in bidding wars through realtors on similar units in the same development.

Ms. Venza said the similar condo she lost was in better condition and was listed at $375,000. During the auction for Mr. Kagan's unit, she remembered that.

"I kept thinking 'O.K., what's another $500? What's another $500?' " Ms. Venza said. "But with a new kitchen and to redo two full baths, it would have run me at least $40,000."

She would prefer to deal with a seller using a broker next time, she said, feeling that "it would be more up front."

Larry Kagan is so pleased with the results of his auction he is thinking he'd like to do it again. With someone else's house.

"A lot of people are interested in this, but they don't want to spend the time and make the calls," Mr. Kagan said, as he stretched his arms out along the backrest of his rented sofa. "Who knows, this could be a business for me."

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