In an effort to stimulate business in what are for most the worst economic conditions in their lifetimes, builders are turning to real estate auctions to liquidate new home inventories. While there are several variations on the basic auction form, including time limits, minimum or maximum limits on bid prices, and special rules for determining the winning bidder(s) and sale price(s), many builders are reporting varying successes. Charlotte-based builder, Southampton Homes has recently engaged Tranzon/Metrolina to auction six custom homes to bidders searching for good values.

“The slow housing market in the Charlotte area is forcing owners to try new avenues to sell their homes,” says Don Eldred of Tranzon/Metrolina. “Builders are embracing auctions to gain the benefit of competitive bidding for their properties and to liquidate homes quicker than with traditional sales means.”

Traditional real estate listings typically take several months or more to move a property. The auction process, also referred to by auctioneers as the accelerated marketing method of real estate, entails an intense five to six week marketing period that exposes properties to local and national markets. An auction will generate more activity and interest than conventional methods. The process culminates in a cash sale, closing within a 30-45 day window.

Out West, online real estate auction marketing firm, LFC Group of Companies, recently launched a new auction campaign of brand new homes in Denver, Colorado. The auction, a builder closeout of high-end properties in the master-planned community of Stapleton and the charming town of Golden, features four boutique townhomes and four large estate homes. They are the last remaining inventory of a well-respected local developer, and is further evidence that online auctions are becoming popular again as an alternative for healthy builders and developers eager to accelerate sales.

The homes offered by this builder are diverse, yet they are all impeccably designed and very upscale,” described Kelly Lovegrove, Director of Operations for LFC Group of Companies. “We are seeing more and more developers like this who see auctions as a smart way of doing business. Rather than lowering prices until buyers bite, sellers are letting the buyers decide what they want to pay–a powerful tool in times like these.”

The LFC Group of Companies also launched another new auction for Brava, 16 luxury condominiums located in the heart of Palm Desert, California, where Patrick Veiling, president and founder of Brea-based Real Data Strategies Inc., said, “2009 will be the absolute best purchase opportunity in the desert that we have seen for a long time.”

“Brava’s developer has the foresight to act confidently, staying ahead of the game with a keen insight into keeping buyers happy and moving development forward in any kind of market conditions,” says William W. Lange, LFC Group of Companies’ CEO. “They see that the accelerated marketing our online auctions offer can speed up the process of clearing inventory, allowing them to focus on newer projects.”

In light of these and other successes, at the very least builders should consider the auction process to help move inventory and generate the cash flow necessary to keep afloat and take advantage of the up cycle many expect in 2010.

Peter L. Mosca

Kenneth R. Harney

Tax filing season is just weeks away, but real estate investors, commercial property owners and developers still have tax-saving options they may not have considered.

Realty Times talked last week with one of the country’s top real estate tax advisors, John Michel, national real estate tax partner for the accounting firm of Grant Thornton, to get his advice.

Unlike some CPAs and tax lawyers, Michel puts his expertise to work in his own investing — he just recently bought an office building in downtown Cincinnati — so he knows the practical aspects, not just the rulebook.

Here are some of the key areas Michel suggests fellow investors focus on right now:

Gear up to challenge property tax assessments more aggressively. Commercial property values and rent rolls aren’t rising in most parts of the country at the moment yet tax assessors are under pressure to produce maximum revenues for municipalities and counties.

So play it smart: “You’ve got to be ready with the hard facts” on negative market changes, says Michel — tenants moving out, tenants unwilling to pay higher rents, retail sales down-all of which relate to property valuations.

Among the key areas of assessments to challenge, according to Michel: Non-real estate elements of your property — everything from electric signs to equipment and fixtures to lighting systems and other depreciating mprovements you’ve made.

Michel also urges clients to make maximum use of so-called “green” tax incentives, at the federal and state levels. For example, Congress recently extended special tax writeoffs for energy improvements — insulation, lighting and heating and air conditioning systems — that can save you a lot.

Congress also approved extensions to expiring tax credits for certain solar energy panel installations, which are especially valuable in parts of the country with lots of sunlight most days of the year that can be sold to tenants or back to the local utility grid.

Michel also recommends that in the current recession, property owners be prepared to claim “abandonment losses” on spaces vacated by tenants where improvements were made specifically for those tenants and can’t be reused. If the improvements have not been fully depreciated, building owners may be able to claim sizable deductions in the wake of the tenants’ departures.

Finally, Michel advises property owners to keep a close eye on Congress. The new stimulus package may well offer tax benefits that you can put to immediate use, including a restoration of last year’s “bonus depreciation” writeoffs for certain equipment you install, plus “weatherization” energy conservation credits for commercial property owners.

Walter Sanford

Without making time for the most profitable activities, I can tell you exactly what will happen — you are going to be spending time on the most urgent items which are almost never your most profitable activities. The reason why my lead generation book is so popular with top agents is because it points to the direction of the most profitable activities in real estate. One needs now to decipher how to implement these activities on a consistent basis.

Many of the activities we cover in our systems are not done consistently by many top agents in our country. For instance, you need to choose a few seller lead generation activities. Whether you choose for sale by owners, expireds, mature people in large homes, out-of-state owners, or any of the any other amazing systems that will produce seller leads, you need to find the time to make sure they are getting done on a consistent basis. By implementing the ideas, your listings will go up, increasing your buyer inquiries. Buyers, being the demanding lot that they are, will soon cause you to be jumping through hoops at all hours of the day, if you have not followed some of the ideas shared in Buyer Net Profit.

Without time-blocking, you will find that you will always be urgently busy without getting your most profitable activities done therefore your listings will fall and buyer activity will fall. The largest difference between mediocre real estate agents and top producers is that top agents always find time to keep their pipelines filled with the most profitable activities. The most profitable activities are, of course, lead generation activities. These activities are normally time-blocked by the top agent to do himself or herself or activities for the assistant to complete.

Let me give you an example – at 9am every morning, I knew that I would spend 15 minutes researching the expireds of that day. I spent more time than anyone else researching and getting better names, addresses, and phone numbers. I then spent another 15 to 30 minutes preparing letters for mailing in the firecracker tubes. I would then start calling those same prospects. On my way back from lunch, I would time-block my day to stop by one of the most expensive expireds each day. On my way home, I would try reaching those expireds who I could not reach earlier in the day. The next day after I called all the expireds, I went ahead and sent them my crumpled letter from the previous day. There was little or no negotiation with the time-blocks. The only thing that would allow me to look the other way is a listing presentation or a family emergency.

The other activities that I would like to make certain that you time-block are just as important as your seller lead generation activities, especially activities where you knew the exact number that you need to complete. Here is what I mean — if you have a 1,000 person database and there are approximately 300 working days in a year, you should be calling six people a day to get through your database with phone calls twice in a year. It would most likely be more calls in a day, because I would like for you to try calling three times before giving up and putting them back in rotation. The same goes for the letters to the database – if you are going to be sending one letter each quarter and there are 100 working days in a quarter, you will be sending approximately 10 letters a day to get all the letters to your database for that quarter.

The magic of breaking your business plan into time-blocked pieces is that it allows you to “eat the elephant” faster and more efficiently. It also allows you to write personal notes on those letters, hand-sign them, and see if any of the letters might require special handling.

Another massively important time-block is listing leads in the “A” class. This group is for people who are going to be listing in the next ninety days. You were either unsuccessful in getting them to list, or they have promised you a listing. Even though they have told you not to call back until a certain time-frame, it is your job to call them each week with something of value to weigh their motivation and readiness without letting the lead pass you by. It is important that you maintain contact on a much more regular business than the “soon to list” person tells you contact.

Another amazing time-block to maintain is the buyers in the “A” class group. These are buyers who have jumped through all the “hoops.” This means they have answered the questions, been pre-approved in writing, have showed up for a meeting at your office, and have signed a loyalty agreement. These people need to be time-blocked for once a week to determine if the properties you are sending them still meet their criteria and when they would like to go look at the best leads.

Broker-required activities is another time-blocked section. Whether it is a profitable office meeting or an office tour, just remember, the broker is paying the overhead so support the systems.

Another important time-block is calling your sellers. In tough markets, there is one truism – if they do not like you, they are less likely to drop the price for you. The easiest way to babysit upset sellers is to take your listings and divide by ten. Call that many people each day. This gives you the energy to bring about a price reduction or obtain a value enhancement. Many real estate agents wait until their clients become discouraged then go through their entire listing inventory trying to obtain price reductions or value enhancements. That process is not only an energy-zapper but it is also ineffective. Regular contacts from you will allow your sellers to feel at ease that the job is being done. You will soon find that they will not be available for appointments, because they trust your efforts so much. Efforts like this allow the inevitable price reductions in tough markets to be easier. Please time-block your listed seller communications.

Add in contact to your pendings for another time-block activity. Each week, you need to contact all parties involved in a pending – sellers, buyers, cooperative agent, affiliates, and anyone else involved. I spent Thursdays making sure that all contingencies were being met, and there were no smoldering embers that needed to be put out. Staying on top of pendings will allow you to flush out the bad transactions sooner and possibly reduce problems that might affect your closing. You will grow to dislike the pending process so much that you will try to increase the velocity of your business by shortening your pending periods. As long as they are pending, you need to call all parties involved at least once a week.

Another important time-block is making time for your LIFE! Some of these items are “floating” like your daughter’s dance recital or your son’s game, but some of these items can actually be anticipated like “date night.” I chose a weeknight as date night because babysitters are more plentiful during the week and the lines at our favorite restaurants were not so long! It was also a nice break during the week, and everyone always looks forward to date night. The same process applies for working out, lunch, breakfast, church, and other mandatory parts of your life that allow your life to go more smoothly. Having these things time-blocked will reduce any disappointment in your family and allow you the opportunity to re-make appointments with clients.

This is the perfect time to bring up an important distinction between time-blocked and non-time-blocked agent schedules. When I knew that I only had a few different hours in which to book a listing presentation, a showing appointment, or a negotiation appointment, it allowed me to funnel the cooperative agent or client into those available slots. I was able to always give them three or four hours a day from which to choose. Without a time-block, you are always moving your most important activities around urgent activities, when it is much easier to book urgent activities in the time allotted. I promise that the cooperative agents and clients you are working with will have less disciplined schedules, and you will be able to conform to your available times.

Occasionally, there will be an infrequent time-block for activities that only happen once a month or once a year. These activities would be time-blocking the first and last day of the month and the first part of the New Year for excessive expired activity. These are times when the expired activity is so heavy that you will have to free up time to take advantage of it. These items need to be time-blocked at your goal setting session early in the year. Do not forget to time-block your goal planning session, too!

The process of time-blocking is fairly simple. Time-block the activities that are important to your life. Time-block your lead generation activities. Time-block your listing leads “A,” buyer leads “A,” pendings, and listed client activities. You will soon find that you have a lot fewer hours available during the week than you realized. Of course, these time-blocks will be devoted to listing appointments, showing appointments, contract negotiations, and all of the other “emergency” activities that we are all involved in.

You will find that when your time becomes scarce that putting a “do not disturb” sign on your office door will become a much better idea! You will also find that hob-nobbing with other real estate agents or affiliates will become activities of the past (possibly). Soon you will be prioritizing your free-time among activities including family, fun, faith, friends, fitness, and personal finances. You will find that urgent items will be either eliminated or lessened.

Time-blocking is the first step to true time management and forces you to do the items that are the most profitable in your business. Soon there will be no more excuses that you are too busy to make money in this business.  Congratulations!

PJ Wade

Anyone who has hit a speed bump knows there’s a right way and a wrong way to take this arbitrary, often irrational, obstacle to your intentions. The recession is a speed bump, a big one, but just a speed bump. If it is taken the right way, it will not be a barrier to a satisfying future, but a springboard — your choice.

If you use the recession as an excuse for anything, you’ll lose. If you decide to let these “down” times help you get ahead of those who seemed miles in front of you during the boom, you’ve got your mind in the right gear. It’s not the recession, it’s your reaction that matters.

If you don’t like my metaphors for the opportunity that lies ahead, discover your own. Let the shock and grief wear themselves out as quickly as possible, and then ask yourself, “How are things different for me now?” Don’t let this economic equalizer go by without stopping to think about what has really happened.

In this column, we’ll continue to zero in on real estate, home, small business, communities and related relevant decisions to share views on why this could be a significant, productive time in your life. As futurist and strategist, my perspective is not limited to this vital slice of life or the economy, so realize that what is said here can be extrapolated into many parallel and overlapping areas.

Reinventing your lifestyle or SOHO business may require a new way of thinking at some, or all levels, and in the way you make repeated and one-of decisions. For many real estate buyers and owners, the problem has been following, not thinking for themselves. The New Year offers an excellent example of what is meant by this.

Western society promotes the custom of making New Year’s resolutions to start the year on the right foot. These statements often become self-defeating illusions that can reinforce one’s sense of powerlessness over change. By now most, if not all, of your resolutions have faded, unachieved, into the past. This may have convinced you that change is beyond your control.

Resolutions are publicly-declared attempts at abrupt personal change. They initially create the illusion of progress and a fresh start. When resolutions crumble, they can leave a publicly-humiliating sense of failure, a negative view of a fresh start. The dire predictions and consequences attached to the recession have robbed many from even the illusion of a clean slate as the year begins.

Success with self-directed change lies in striking a balance between society’s customs and proven methods for self-discipline and personal improvement. For instance, our culture emphasizes beginnings as essential for change—start of the year, first of the month, beginning of the week. These are artificial markers. Try the month you’re in, the 14th, a Friday, or the end of something. Does waiting improve success? What’s wrong with now? Resolvers who succeed with their goals do so because of the way they approach the task, not because of the date they begin.

Start now as you read. What do you want to change—pay cash instead of using credit, make more than the minimum monthly payment on your mortgage, finish each home maintenance task you start…what home ownership patterns would create benefit if you varied them?

How can you be sure to stick with the improvement you’ve decided on? Attitude.

Most people try to think themselves into change, but the best way to maintain a new behaviour is to act as it the improvement has been made and you’re just continuing on. Make a positive statement that embodies the goal, and keep repeating it. Believe you’ve made the change, and act accordingly. Say to yourself: [bullet] I pay cash, or wait ’til I can. [bullet] I will own my home “X” days or “X” dollars earlier. (Use an online mortgage calculator to determine what you can save with even small payments, and you’ll become driven.) [bullet] I’m building equity, sale-ability and choice with each property-management task I successfully complete.

Fine-tune your behaviour as you go, and take on new home-equity building or value-appreciation tasks. You’ll stay ahead of market trends and continue to ensure your real estate is working for you as an increasingly valuable and useable asset, not a burden. You’ll find your value system readjusts to make this a permanent way of acting, probably before you’re completely aware of the new you.

I can hear, “Yeah, but what if I can’t resist the old ways”—racking up credit card debt, borrowing to make the minium mortgage payment, watching YouTube goofs or gaming instead of looking after what I own. Sliding back into well-worn habit ruts does not cancel out success. The conscious effort to correct yourself makes success sweeter. Just stop the old habit immediately and put things right. Return the indulgent purchase. Review the budget for extra mortgage loonies. Turn off the electronics and build some sweat equity in the real estate that houses your future.

Inventor Thomas Edison “failed” his way to success along with countless other high achievers, so why can’t you? “Onward & Upward” is my reminder that investing in “now and next” is more useful than whining over what was or should have been.

Yes, fasten your seat belt, you’re in for a bumpy ride, but you can still reach your destination. Where are you headed in 2009?

NEW YORK (CNNMoney.com) — The real estate market is so awful that buyers are now scooping up homes for as little as $1,000.

There are 18 listings in Flint, Mich., for under $3,000, according to Realtor.com. There are 22 in Indianapolis, 46 in Cleveland and a whopping 709 in Detroit. All of these communities have been hit hard by foreclosures, and most of these homes are being sold by the lenders that repossessed them.

“Foreclosures have turned banks into property management companies,” said Heather Fernandez, a spokeswoman for Trulia.com, the real estate Web site. “And it’s often cheaper for them to give these homes away rather than try to get market value for them.”

In Detroit for instance, Century 21 Villa owner Randy Eissa has a three-bedroom, one-bath bungalow of about 1,000 square feet listed at just $500. It’s a nice place with lots of light, but it needs a total rehabilitation inside, which Eissa estimates will cost between $15,000 and $20,000. But that’s not bad, considering that the home last sold for $72,000 in late 2007, according to Zillow.com.

With prices this low, lenders aren’t looking to make any money on these deals. They just want to get these houses off their books, so they don’t have to bear the cost of maintaining them and paying property taxes.

In fact, the $500, $1,000 or $3,000 that a buyer forks over often goes straight to the real estate brokers as a commission. And often the lenders have to kick in extra cash to make it worthwhile for a realtor even take the listings, according to Eissa.

“Usually these homes are bank repossessions that the lenders have already tried to sell on the market, perhaps then put up for auction without success and then re-listed,” he said.

These houses are almost always small fixer-uppers. Wiring, plumbing and heating systems have to be replaced, walls and ceilings sheet-rocked, plumbing and light fixtures installed and new kitchen cabinets and counters put in. Few come with working appliances.

Often buyers are legally required to rehab these homes to bring them up to code. In Detroit, buyers are required to sign Affidavits of Compliance Responsibility, which obligates them to make repairs outlined in an inspection report. Only after that can a certificate of occupancy will be issued, which makes the house legal to live in.

But even factoring in these costs, they’re still bargains.

And as the housing crisis drags on, there are more and more four-figure listings popping up, as lenders try to unload their repossessed properties.

Cleveland is another city with many incredibly inexpensive homes. On Ardenall Avenue, in East Cleveland, McMullen Realty has a listing for a four-bedroom, one-and-a-half bath house for $1,900. It’s been vandalized inside, but the outside is in good shape.

It features a deep front porch with Doric columns, double dormer windows and a separate garage. It’s an excellent opportunity, according to agent Tonya Stoudamire. The last time it sold was in March of 2008 when it went for $16,677, according to Zillow.

“East Cleveland has a beautiful housing stock,” she said. “These houses just need someone to come in and love them a little.”

Another property for sale in Birmingham Ala. is priced at $1,900. The one-bedroom, one bathroom home was built in 1923 and has major fire damage, according to its listing broker, Tom Murphy Realty. The listing states that “Rooms are hard to distinguish.”

But it’s on a nice-sized lot, about 0.38 acre, close to downtown and transportation and has all utilities. Nearby, comparable homes in good condition sell for about $100,000, according to Zillow.

Most of these $1,000 homes can be renovated relatively inexpensively, and buyers can actually get government help to finance these repairs. The U.S. Department of Housing and Urban Development (HUD) has a special loan program for just such purchases.

Its rehabilitation mortgage insurance, available through FHA-approved lenders, was designed to encourage banks to issue a single, long-term loan to buyers that covers both the acquisition and rehabilitation of a property, according to HUD spokesman Brian Sullivan.

He adds that there may also be grant money available from the $4 billion Neighborhood Stabilization Program, which was a part of the massive housing rescue bill passed by Congress in July, to assist buyers with grants for down payments.

Buying homes like these is certainly a leap of faith; they’re generally not in the best of neighborhoods and they’re often surrounded by many other vacant and deteriorating homes. Still, some of these neighborhoods may turn around and provide residents with good, dirt-cheap housing.

“It’s a sad time,” said Stoudamire. “But it’s also a time of opportunity, especially for low and moderate income people.”