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Winning Bidders Get the Applause With BC-Home Auctions

August 13, 1990

NEWPORT, R.I. (AP) _ It looked like a television game show setup, replete with hundreds of spectators, a gavel-bashing host and a raucous band that exhorted the audience to applaud the best players.

But the business at hand in the Newport Marriott Hotel wasn’t a contest for winning cash, cars or washer-dryers. The players were homebuyers and investors, and the prizes were prime pieces of New England property, sold at auction by developers under pressure because of a weak real estate market.

Auction day was a Saturday afternoon in late July, with about 500 people jammed into the ballroom of the hotel in this quaint waterfront town known for its swank mansions, sailboat racing and summertime jazz.

Most prospective buyers already had toured the properties to be auctioned, two fancy-sounding subdivisions named Butterfly Estates and Weekapaug Bluffs in nearby Rhode Island communities. The units for sale ranged from empty lots to townhouse condos.

Prospective bidders came to Newport with the plot numbers of their favorite sites in hand, hoping to win one at a fraction of the original asking price.

The bar outside the ballroom didn’t do much business, just a few beers and glasses of wine. Inside, a three-piece combo played while auction-goers milled about discussing the sites.

After company president Steven L. Good outlined the proceedings, auctioneer Gordon Green led the group through a mock-auction as bid-spotters worked the crowd. The practice auction involved Newport mansions, and the phony bids were in the millions.

Green managed to keep the crowd, for the most part quiet and reserved, laughing and interested.

″With a name like Weekapaug Bluffs, these lots have got to be good,″ he said.

Weekapaug, in the coastal town of Westerly, was built in 1988 when the value of oceanfront property was rising dramatically. The units are within walking distance of two golf courses and have a view of Block Island Sound.

Bidding started at $65,000 on the Weekapaug Bluffs condos, originally priced at $285,000 to $325,000. Offers shot up to $140,000 in 25 seconds. Two minutes later, the first auctioned unit sold for $142,000.

The next went for $140,000, and after that prices leveled off around $138,000. Forty-five minutes into the auction, the units were being snapped up for about $131,000.

To the auctioneer’s left, signs representing the auctioned units were moved from the ″Available″ board to the ″Sold″ sign.

After each winning bid, the band would strike up a jaunty tune as the buyer moved to the front of the ballroom, like a game show contestant receiving his prize. The crowd clapped.

After the buyer filled out the necessary paperwork and put down deposits, he was escorted to the ″mortgage rooms″ on the other side of the floor to work out details with representatives from Rhode Island’s Fleet National Bank, which offered financing.

Dennis and Debra Rider, of Enfield, Conn., claimed the seventh unit sold for $137,500. The Newport auction was the first for the Riders, who bought the Weekapaug Bluffs property as an investment and don’t plan to move there.

″We got caught up in the excitement of it all,″ Dennis Rider said later. He ended up paying about $2,500 more than he wanted to, ″but we got the style we wanted.″

Why did they do it? ″The price and the willingness of the banks to work with us,″ he said.

When the day was over, Sheldon Good & Co. had pulled in $4.6 million in total sales, said company spokesman Terrence Kaye. That included 21 condos sold at the Weekapaug Bluffs site, and 31 of 34 plots of land at Butterfly Estates.

The Butterfly lots, in the town of Lincoln, originally were priced at $100,000 to $400,000, but went for $50,000 to $82,000.

Some prospective buyers left disappointed they hadn’t ventured any bids.

″We considered buying,″ said Cleve Elswick of Warwick, R.I. ″but it was a little bit higher than what we wanted to pay. Of course, the prices went down.″

Nonetheless, Elswick, who works in real estate, and his wife, Ruth, came away with a newfound admiration for property auctions - mainly because there weren’t any pushy real estate agents in bright blazers shoving contracts in their faces.

″Here you have total control of yourself,″ he said.

End adv for Sunday Aug. 12

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