In This Corner: Hudson and Marshall’s Dave Webb Q&A

The real estate-owned auction space is hot, and it was never more apparent to HousingWire than when we first set out to have a discussion with a key player about our upcoming July feature. HW recently caught up with Dave Webb, principle at auctioneer Hudson & Marshall of Texas, just before he jetted across the country for another series of REO home auctions in the Northeast. A busy man, Dave took a few minutes to sit down with HW in the auctioneer’s Dallas office. With a backdrop of blown up images from H&M’s auctions — including one of Dave in the auctioneer role — lining the wall, Dave Webb talked business, the housing market and recovery signs. As the product of that discussion, HW presents its first online question-and-answer session to reach its Web-based readers even before its magazine subscribers. Get comfortable, folks. There are a lot of other discussions penciled on our schedule in the weeks to come… HW: Because of your line of work, you seem to keep a finger on the pulse of local housing markets. From your vantage point, which housing markets do you think will likely reach bottom first and why? Dave: “States saturated with foreclosures that have been hit hardest by the collapse of the subprime mortgage market and unemployment are showing signs of bottoming out already. Nevada, California, Arizona and Florida, all consistently have ranked in the top five for the highest foreclosure rates in the nation over the past three years. “But the good news is all these states are showing glimmers of a recovery. According to the National Association of Realtors, all these states posted huge sales gains in the first quarter of 2009, Nevada’s sales increased by 116% from a year ago and California jumped 80%. Hudson & Marshall is seeing a good amount of bank-owned homes in these markets and from what we can tell there are more foreclosures on the way. I think the banks are still backlogged with REO property and are holding onto some of their foreclosed homes until the property values begin to rise a bit, which they are in the Sunbelt states. “Consumer demand for foreclosures is very strong right now because the prices are so low and the deals too good to pass up. Foreclosures and the main driver of sales in the hard hit Sunbelt states showing signs of a recovery. The rise in foreclosures across the county has pushed average home prices back to 2002 levels. As demand for these properties continue to increase we’ll see values go up also. I think we’re a ways from hitting the bottom of the market in most other states.” HW: Why is it important to your business model that you retain the property listing agent in the auction process? Dave: “H&M has been in the auction business for over 40 years and specializes in marketing and selling REOs. Through the years we have found that the listing agents are one of our best marketing tools in selling property. They’ve usually listed the homes from three months to about a year and know all the details about the property, which is very helpful when buyers have questions about the homes. When buyers are educated about the property and the auction process we find they are more likely to pay more for a bank-owned home. “In all our marketing material, we encourage buyers to talk with the listing agents, use them as a resource to find out what the comps are in the neighborhood and get advice on the home’s market worth. Real estate agents are truly partners in the auction process and help Hudson & Marshall sell the large volumes of REO we do each year.??” HW: It seems your business model is a premium service. What aspects of your business put Hudson & Marshall of Texas a cut above its competitors? Dave: “Hudson & Marshall’s attention to detail and extraordinary customer service to both our sellers and buyers really set us apart. Our staff is trained to make our customers their top priority. We are a full service auction company that offers turnkey services and we’re eager to answer questions and facilitate changes from our seller clients in a timely manner. I think innovation is another thing that makes us different. We’re always looking for new ways to improve upon our results for our clients like launching our community outreach program this year and our home buyer seminars. “Over and over again, we hear from first time auction goers and repeat buyers that Hudson & Marshall makes the auction process easy and demystifies any concerns they may have. Buyers look forward to coming to our auctions because they know they’re going to have fun and leave with a great piece of property at a great price.” HW: Do you still enjoy walking onto the auction floor as an auctioneer? If you had your choice, would you be doing that every day? Dave: “No matter how many auctions I do, I still find great excitement walking the floor and engaging with the audience. There’s an energy that develops on the floor you can’t describe. The fast pace of the process really puts everyone in a great mood and it’s terrific to see a crowd get worked up and ready to bid. Some buyers just can’t help but smile or let out a shout when they’re the winning bid on a property.??” HW: In an earlier conversation of ours, you mentioned that with the advent of the Internet, it’s not unusual for many auction homes to be sold before they hit the auction floor. Is this a trend you see growing in the future? Dave: “Yes, Hudson & Marshall is seeing more and more of our homes pre-sale before the auction. In many states, it’s not unusual for us to pre-sell 40-50% of the homes before the auction. We’re about to kick off a sale in the DC-MD-VA area and we have already pre-sold 40% of those homes. Our very targeted marketing program is driving the pre-sales. “Another thing helping pre-sell the homes is the historic rise in foreclosures across the country over the past three years.  Consumers are much more educated about these type of homes and eager to buy them. Foreclosures today aren’t like those five or 10 years ago. Many foreclosures sitting on the market today are in move-in ready condition. There is an abundance of  investor inventory and there’s much more variety.??” HW: It seems you sell your properties close to market value, even though these are considered “distressed” properties. In the process, do you alienate certain investors looking for deeper discounts? If so, why don’t you sell properties for pennies on the dollar or tap into the whole loan market where these investors like to shop? Dave: “Hudson & Marshall works closely with our lender clients to understand their needs and what they want to get for their properties at auction. At the same time, we try to communicate market conditions to our clients so they can adjust their pricing if necessary in markets. The bottom line is no seller whether a bank or individual can just give a property away. A properly marketed auction leads to consumers driving the price of a property and allowing it’s true market value to emerge on a given time and date.” HousingWire covers the issue of REO auctions in depth in the upcoming July magazine issue. For exlcusive coverage and to read more from Dave Webb on Hudson & Marshall’s process in facilitating REO auctions and stabilizing neighborhoods, sign up here.

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