THE ENTERPRISE - Six Falmouth Condos Sold...

December 26, 2007

The Enterprise - Upper Cape Cod News and Information
Posted in: Top Stories
     All you needed was a check for $5,000 in your pocket and a promise of financing and you could participate in what may have been one of the best real estate deals in a notoriously soft market.
     Six newly-converted condominium units at the 10-unit Gateway Apartments complex on Route 28, just north of the Palmer Avenue bridge, each sold for between $101,000 and $117,000 in an on-site auction earlier this month. The apartment complex sits on a 1.2-acre lot.
     Condominium units on Cape Cod sold for an average price of $305,000 this year, though the Gateway apartments, with just one bedroom and bathroom, are smaller than average. Four of the units had already sold prior to the auction, two for $150,000 and two for $200,000.
     Sure, the units are in what must be called a difficult location because of the unrelenting traffic on Palmer Avenue, particularly in the summer, but the property is bordered in the rear by the Shining Sea Bikeway and is less than a mile from downtown.
     The marketers of the auction played up the positives, that the property is technically in "West Falmouth," according to its address of West Falmouth Highway. The brochure also stated that the units are "surrounded by woods," seeming to overlook the highway on one side.
     Nevertheless, brokers, speculators, and developers could smell a deal and packed the empty condominium unit where the auction took place.
     The owner of the property, Robert F. Burke of Hill and Plain Road, Hatchville, who also owns Jack in the Beanstalk produce market, watched the auction from the doorway of the unit.
     According to Enterprise archives, Mr. Burke's brother, John D. Burke, purchased the abandoned property in a foreclosure sale in 1984 for $164,000. It contained a five-unit motel building that had been owned by Laura L. Baker. The Burkes transformed it into a 10-unit apartment complex.
     Falmouth Planning Board was not happy when the Falmouth Zoning Board of Appeals allowed the abandoned five-unit motel building to be converted into 10 units. The planning board wanted to take the zoning board to court over the issue, but the selectmen refused to grant funding for the lawsuit.
     The apartments have been rented for more than 20 years. One interested bidder was told the one-bedroom units had rented for about $900 a month.
     Going, Going, Gone
     Fifteen minutes before the auction began, only a few people were milling around the units. But at go-time, at 2 PM, unit #16, where the auction was held, was packed with dozens of people spilling out the front door and into the back bedroom.
     As the auction began, Jerome J. Manning of JJ Manning Auctioneers explained that the first three units would be selling "absolute," meaning with no minimum, regardless of what was bid. Those three auctions would be "buyer's choice," meaning the winning bidder could pick which unit he wanted after winning the auction.
     The other three units had a minimum price, but the price was not disclosed since they ended up going for more than the minimum.
     Among those crammed into the room was William Carey, a loan officer at Citizens Bank, offering his services to buyers. "I'm excited to write more mortgages," he told those gathered.
     Mr. Manning said he had been in business 32 years and had conducted about 14,000 real estate auctions.
     He said buyers must do their own due diligence before making a purchase and rely on their own inspections of the properties.
     Units would be sold "as is, with all faults," Mr. Manning announced.
     One man had not checked out the units, and he asked whether there would be time to examine the units after winning the auction but before making a final decision.
     "Look at these people's faces. I can't do it," the auctioneer said, noting the impatience in the crowd.
     After each of the six auctions was completed, each taking only a few moments, the winning bidder was asked to sign paperwork and give a check for $5,000. Four days later, a 10 percent deposit on the units would be due. Closings on all the units would take place 45 days later.
     Mr. Manning explained a buyer's fee of 10 percent would be added to all winning bids as a fee to the auctioneers.
     "Don't bid if you can't pay," Mr. Manning said.
     On the other hand, he said, if you want to buy, you need to bid. In all the auctions he had conducted, he had never sold a unit to someone who did not bid, he said with a smile.
     The first auction began at $20,000 and quickly hit $50,000, then $100,000. From there it almost sold at $105,000 before inching up to $110,000.
     The winning bidder chose one of two larger units, at 957 square feet.
     The second auction started at $75,000 and quickly reached $110,000. It sold at $117,500, and the buyer chose the other large unit, also 957 square feet.
     The third and fourth auctions both began at $50,000 and in a few moments closed at $101,000.
     By the fifth auction, buyers in the room seemed to warm up to the prospect that some good deals were going down, and the action would be short-lived. There were  numerous bids and a lot of back and forth between two bidders. When the price reached $105,000, the competing bidder shook his head "no," he did not want to continue. Then he quickly changed his mind, said $106,000 and captured the unit.
     "You'll look good in it," the auctioneer said to the couple before auctioning the final unit.
     During the final auction, the room started to clear out. There was some back and forth in the $80,000 to $90,000 range before the price went to $97,500.
     The auctioneer tried to twist arms. "$100,000 is what I need. Come on, folks. It's no price for them." The bid came in at $100,000. The man who had been competing shook his head no. He was through. He walked out the door as the auctioneer said $100,000 once. Twice. But just then the woman with the man, who was two steps behind him walking out the door, appeared to be caught up in the excitement of the auction and called out "$101,000."
     "Sold," the auctioneer said. The man, who was by then out the door of the condominium suddenly turned around with a look of astonishment and what appeared to be some concern. He was the new owner of a condominium unit.
     The auction was complete, and the six condominium units had sold for a total of $636,500 plus 10 percent for the auctioneers.
     Buyers were reluctant to give their names after the auction. One man said he purchased it for someone else who would prefer not to be named.
     Another man who purchased two of the units appeared to be fielding bids from clients on his cellphone.
     Bidders who came up empty left the auction shaking their heads, with several marveling at the low sale numbers.
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