The Howie Carr Radio Network

Meet The Experts: Justin Manning of J.J. Manning Auctioneers

The prospect of selling your home or property can be daunting: endless forms to sign, inspections to schedule, the list goes on! But what if you could get the full, fair-market value for your real estate quickly and without all of the hassle of a regular broker? Enter Justin Manning of J.J. Manning Auctioneers, a Massachusetts-based auction house in business for nearly fifty years. Howie joins Justin as he breaks down the difference between auctions and a traditional sale and shares how a healthy trust in the process can pay off in dividends.

Duration:: 29m
Broadcast on:: 12 Jul 2024
Audio Format:: mp3

(upbeat music) - Welcome to another episode of Meet the Experts with Howie Car. The prospect of selling your home or property can be daunting. With endless forms to sign, inspections to schedule, the list goes on. But what if you could get full fair market value for your real estate quickly and without all of that hassle that you may find with a regular broker? Enter Justin Manning of J.J. Manning Auctioneers, a Massachusetts-based auction house in business for nearly 50 years. Join Justin as he and Howie dispels some of the myths about bringing your home to auction, break down the differences between an auction and a traditional sale, and how a healthy trust of the process can pay off in dividends. Here's your host of Meet the Experts, Howie Car. Welcome to this week's episode of Meet the Experts with Howie Car. And our guest is an old friend of mine in the shows, Justin Manning of J.J. Manning Auctioneers. And he's been a sponsor of both my show and Grace's for years. He has dealt with many of our listeners and their satisfied customers of his services as an auctioneer. We're gonna speak to him today about the processes of auctioning your property as opposed to doing the traditional real estate listings. Justin, thanks for being with us. Howie, thank you for having me on, I appreciate it. And I think that in my 30-year career, one of the things I've had to really fight is to fight to have people understand what I do, educate them on the auction process. So a lot of people say, "Hey, auction it off, it's distress, it's foreclosure, it's a fire sale." And I guess there could be instances where that would be the case, but our company and our process and what we do is so unique. My dad started it in '76. We originally started the business selling restaurant equipment and then eventually he sold an actual restaurant and we said, "Hey, we're working too hard, cleaning and moving restaurant equipment and shifted back in the 80s." And obviously, depending on the market, sometimes there's some distress and foreclosures that happen for banks which are necessary and could come again. But for the most part, we're working for clients. - Now, most people that are listening to this, if they've sold real estate property, they went to a realtor or a broker, they did it in the traditional way. The sales prices posted, ads are placed and the classifieds are online and people come and visit the house and there's a deadline and bids are put in, et cetera, et cetera. You do auctions. So why don't you lay out the differences between the traditional way of selling or buying real estate that people are familiar with as opposed to an auction with JJ Manning? - The biggest difference, I think, is in process because as I had mentioned to you before, I'm licensed as a real estate broker. I am a realtor with the National Association of Realtors and I have an auctioneer's license and that's specifically in Massachusetts. Every state is a little bit different. Some of them, they don't have an auction license. I'm just a broker. So I have all those licenses and we have all the tools, the MLS and all the other things that would be used in a traditional listing. I guess the biggest difference is in process, okay? So I'm still being hired by the owner of the property to sell their property. But instead of listing it at a price, which is really everyone's guess, could be worth much less or much more than that number that's put out there, putting it out there at a price and then waiting for other brokers to bring you buyers and then start to negotiate with someone to sell the property, our process really refines it and condenses it and makes it very straightforward. So there's two big pieces that are very different. The first is we bypass the offer process. I always say they make their offer when they hold up their number and say, 578 when I'm asking for 600,000, that's when they make their offers. So the traditional offer process is, I'll give you a thousand dollars down and this is what we're willing to pay and this is all subject to a mutually agreeable purchase and sale agreement. That's what we run into a problem. - In an inspection. - So that's the other piece. So the process wise, we skip that offer part. The PNS being mutually agreeable between Howie and Justin, God knows if we ever get to a mutually agreeable PNS, the auction PNS, it's pre-populated. It is the same one everyone's using. And then lastly, most importantly, all those other pieces that have to then click into place to make the deal happen in a traditional deal, the financing approval, the banks appraisal, the home inspection, the septic inspection, the mold inspection, the radon inspection, the water test, you name it. - Don't forget lead paint. - Thank you. All of that, we throw it out the window. If we have the information it's presented, if we don't have the information it's sold as is and straightforward and so many of your listeners, Howie inherit properties from a deceased relative. A huge portion of the clients that we've served in the past four years from your clients have been, they lost a loved one. And they have a house and guess what? Nothing's been done to the house since 1956. It's been in the family the whole time. Our dad did the work on it. Maybe there's things that aren't up to code. Like all of a sudden there'll be a staircase that's a little too narrow, the steps are a little too short or it's missing a step in any of these things. How the cool thing is in the auction, there's an open house inspection, they can check out the property to their hearts delight. But come the auction day, it's sold as is with no contingencies. So for the seller that doesn't want to be raked over the coals with all these little details, we're gonna bring them the buyers that are real, straightforward, don't care about the steps or the railing or the septic or the roof or the foundation. They've already checked it out. They've allocated what they're gonna put into it for that. And they come and buy it cash. And another thing about auctions is, when you put your home on the market the usual way, it could go on forever. But with an auction, you set it up so that there is a 30-30 marketing plan. Explain the 30-30 marketing plan. The other key advantage with the auction is the timeline. The ideal marketing window is 30 days of marketing on a residential property. And then it's 30 days to close. With no variation, what I mean by that is, they're making a 10% deposit and signing a P&S at the actual auction. When I say sold, they come over to the table, sign the P&S, sign over their 10% deposit, and now it's closing in 30 days. Now, they have no out. What happens if they need a little more time? Usually I'll talk to the seller and say, hey, let's get some more deposit money from them to give them the week or two to rustle it together or say no, close or you lose your money. It's a firm closing window. If we had a bigger commercial property, or if I had a marina or a golf course or an office building or something bigger, I might want 45 days on the front end of marketing just to have a little more reach. But if they say I need it done in 30-30, then we get it done in 30-30. That doesn't mean I'm not gonna give them my advice on an adjustment if it's a bigger asset. - Where do people go if they wanna learn more about the JJ Manning auction heirs? - If you are interested in getting your property sold quickly and contingency free, you can visit our website at jjmanning.com. Or call my man Charlie Gill at 800-5-2-1-0-1-1-1. - And by the way, if you are listening to this podcast and you decide to make a decision to sell your property with JJ Manning auction heirs by the end of 2024, you will get a special dinner with how we car. Me, just mention this podcast when you call Charlie Gill at 800-5-2-1-0-1-1. Or you can go to jjmanning.com to learn more. - If someone went to you today and said, "I wanna be out of here, Massachusetts or New England," by Labor Day, could you get it done? - My answer to that is if they had-- - Let's make it veterans day, veterans day, okay? Mid-November. So that's not long in traditional sales terms. - No, I mean, again, just to pair onto your question from before you asked in the traditional listing, they really don't know how long. We know exactly how long. Our timeline is exactly defined. And so if we have all the property information from the client and the house is in, say, a hoarding house that needs to be emptied out a bit, then we're gonna be able to meet a roughly two to two and a half month defined window. And I'll tell you what, to the point where, I'll say maybe a handful of your clients have literally booked the moving truck for the day to match up with our timeline of advertising and closing. That's how defined it is and that's how certain it is. So it's amazing what's important to people, Harry. Obviously, the auction is the consummate appraisal. I don't care what anyone says. An auction that's properly marketed is gonna flesh out all the money. So I'm never concerned with the number, 'cause I know the number is the number. But with regard to what's important to people, what's important to them is, oh, okay, I don't have to take out that old air conditioner and dehumidifier that's up in the attic or in the crawl space, or the little details, or, okay, I can get the moving truck or I don't have to, it's funny what's important to them. And sometimes it isn't the money, but I can assure them that I will flesh out all the money and those little details we can take off their plate. And that's so important to them. It removes stress from the seller's side and the buyer doesn't come in. They're gonna be ripping stuff out and pulling up a dumpster and throwing out things anyway. - You mentioned the number 600 earlier. That's low for these days, but 600,000, and suppose the high bid comes in at 578. Does the seller have the right to reject the offer? - There's two types of auctions. There's those that have a reserve and those that are absolute. So if we don't hit the reserve, the seller doesn't have to sell. - That's like the minimum. - Minimum or reserve would be interchangeable. Absolute sells to the highest bidder, regardless of price. They don't have that luxury. And you say, whoa, that's crazy. Here's the other piece though. When the world of buyers knows the auctions absolute, they all come because they all think they're gonna get a buy. So now you get two or three times as many bidders, creates a more of a buzz bidding war crowd and now it ends up selling for as much or many times more than it should have because of that process. - So I have to explain that to people, do more sellers take the absolute or the reserve? - If they are a repeat client, they'll do it absolute. If they are not a repeat client, they're too green and have too much trepidation to do it absolute. And the other one how he is, if it's someone that's really counting on the money, like Justin, this is my retirement money. I need you to get me all the money and I can't risk anything. That's the person that's probably gonna do a reserve. If it's an institution, an insurance company or a bank or a REIT or some big developer that owns property, they're not so worried about that. So they may take that risk, which does have a nice reward too. - We're talking to Justin Manning of JJ Manning Auctioneers since 1976. So they've been in business for almost a half century now. Do you just handle auctions of personal homes or do you handle commercial industrial land as well? - Depending on the market and the stint that we've had a great relationship, the popular product that was moving was residential homes. And then the other stuff, industrial buildings, commercial buildings, office buildings, they kind of have sat in a weird way 'cause they're usually messed up with whatever loan scenario that they've got. So it depends on the market. If I looked at years going back, it's usually 50/50. If I looked at in the last four years, it's probably 75/25 being more just residential homes because that was a product that was just, whether you were a seller or a buyer, you did that in the last four or five years, that turnover happened. So when we've got leads that come in, how we from all the different types of clientele, it could be a piece of land, it could be commercial auto bays, it could be a golf course, it could be a two family, it could be a single family. Again, because of this mass exodus from this area, we have had a tremendous amount of single family homes that were either a family home or a family member who deceased home that they needed to divest of to head south. - You know, I wrote last week about the new IRS statistics showing that $4 billion of income just moved out of Massachusetts in 2022, the fifth highest state in the union. So people are leaving who have money in Massachusetts. Is this a good time or a bad time to be auctioning off a home, considering the outflow, especially a fairly affluent people? The funny thing is that as many people are moving away, there's that next wave of buyers that are on the sideline that are younger, that of the Grace Curly age, et cetera, that want to get in the market. Why? Because their family isn't moving, their roots are really sunk in it and they don't give a crap how high their taxes are or what's going to happen with this or that. So they're not going anywhere, probably because of family reasons or maybe because of a family business. So there is still a huge amount of buyers that are on the sidelines waiting to snipe and most of them how we can't do it traditional. They need family to purchase and there is some purchasing power out there that surprisingly is still hanging in there. - So it's not a bad time to be selling even though a lot of people are fleeing. - No, I mean, I was looking at a stat from May and they said that May, I think it was for the Cape and it said now the median sale price on the Cape was like 6'10 or something. - I saw that. - Right? - Yeah. - Overlast May and it's really amazing 'cause I saw a listing the other day and it was just like a two bed, one bath, little box with no garage on a small lot that was listed for 549.9. That house was listed for 249.9 five years ago. It's just incredible what is transpired. So again, I can't really tell you the exact wise but I do know that there's still not enough inventory and there still are buyers and most of them need to be able to move quickly and can't use banks and will participate in the auction with money from another resource. - So what's the smallest property you've ever auctioned off? - This was one earlier on in my career that taught me a really valuable lesson in my business and it was to sell a condominium in Buffalo, New York. The property had been purchased by a builder for their general contractor. They were building a big complex out in the Buffalo, New York area. So they bought it instead of renting a property for their general contractor to live in, finish the project and then want us to sell it. I think they bought it for 83,000 and a year later we sold it for 88,000. So they were happy that they just didn't lose money on it. But the amount of time and effort to sell the $88,000 condo is the same time and effort and energy for the $8 million building 'cause the process is the same across the board. The fantastic thing for me was that client was a builder from Connecticut and a couple years later, they were in a little bit of a jackpot and had two unfinished homes in Essex, Connecticut that were beautiful and they hired us to sell them as is at auction. They were incomplete homes. That's a tough thing to sell traditionally because it's how much is gonna cost to finish it. It scares the first time home buyers. So they ended up hiring us to sell two, not say multi-million but both of them were close to two million bucks, a piece. And it really taught me a lesson that you can't just cherry pick the good deals because they were probably testing us to make sure that we were who we said we were at that moment. - What's the most expensive or the biggest projects you've auctioned off at J.J. Manning? - The biggest one for me personally, my dad might've had a larger one prior to me but in my 30 years it was for GE capital in 2010 and we sold REO property for GE and for those of you that don't know, REO means real estate owned and that means that the lender has taken the property back. - For closure. - For closure or how you deed in lieu of foreclosure where they just give you the keys and sign off and say you can have it. So this was a REO for GE capital. We did the auction, huge crowd and the buyer was Jonathan Davis of the Davis companies who bought it for $33 million. He put a lot of money into it, put great tenants into it and then sold it for a lot more money years later after he had improved it to add value. A real smart guy and someone I've worked with many times over the years. - If people want to auction it off, how much is it gonna cost them to sell it through you at JJ Manning as opposed to a traditional real estate agent? - What I'll tell you is when you list a property for sale, you just agree on the price, you sign something and now it gets put on MLS. I feel there's a flaw in that system because I went to Babson and I studied marketing and I learned from professors that were on sabbatical from Walmart and different big national companies and learned how to market. And I would say that in our process, a seller always has to put up some advertising money, howie, but we always tell them, you're gonna get accredited back to you. So the format of most auctions of any type of commodity, including real estate, is there's a buyer's premium that the buyer pays and that buyer's premium is going to pay Manning, it's gonna pay any buyer's brokers and it's gonna pay the seller back, the ad money they put up in the match. - So when you say a buyer premium, you mean that's money upfront? - So if there's a 10% buyer's premium and the high bids 500,000, the purchase price is 550. It gets tacked on to the high bid to constitute the purchase price. To then pay Manning, pay any buyer's agents and pay the seller back the advertising money, which usually is around a point, give or take. Here's the flaw though, howie. In a listing, when you list it for sale with a broker, you don't know how much or how little advertising they're gonna do if any other than put on MLS and put it on their website. That's a flaw. People don't find out about stuff for nothing. You gotta be loud and outward about it. So for us, are 30 days that we talk about? That is a power pack 30 days of marketing. We put together the budget for them. We show them all the places it's gonna go, whether it's from old school newspapers to social media and everything in between. That's what gets the turnout. And that's the piece that I think is missing in a traditional listing where they put it out there and wait for something to happen. We make something happen. We can't afford, we don't have the time and we can't afford to wait for something to happen. We have to make it happen. Okay, 6% on a real estate broker, let's say, right? So what would yours come out to? - So that's generally what we would end up netting. So think about this. There's gonna be 2% offered to a buyer's broker. The advertising, depending on the size of the asset, could be one to 2%. Manning is generally as a firm because of the energy and the amount of time we're putting into it. We're generally netting 6% on a given deal. But again, all of it is contained within that 10% premium that the buyer's paying. And I'll tell you, some buyers factor it in. Some buyers want the property and don't want that guy to win the bid so they don't factor it in. It's like when they go buy their Mercedes, they're not thinking about the 6.25% mass tax. They're thinking about the price I'm paying for this property and making sure I get that car right there. So when you get into fine arts and antiques of auctions, you see 23% buyer premiums like crazy stuff. We keep it contained. The seller's gonna know that they're going to net the bid that comes in, minimally, if not a little bit more. - Suppose I wanted to sell my condo today in Wellesley. How soon could you have it sold, do you think? - So if the mailroom manager had her file of all the details of this, 'cause you've probably improved it over time and you've got a tax bill, we've got a unit plan, we've got the dues, the assessments, yes, all of that. So if you had all that, I would say, because we're right at the moment where there's a lot of vacationers, I would say that the auction would take place in mid-August and it would close mid-September. And I have to tell you that, as I always bring up my main man, Charlie Gill, Charlie and I have been talking to a lot of people and it is our opinion at the moment that those people that have wanted to sell and want to sell, that getting it sold and closed prior to the next election is an important thing. Why? Because historically, elections create volatility. There's no need to expand. We all know why people want to expand. There's only so much gambling people want to take with their personal finances, their personal future. If you want to sell before the election, you can probably get your property sold, if it's a house. - Yeah, I think if it's not some gargantuan complicated asset when I say that, you know, I'm talking about something that may have in some environmental concerns. Like we have one right now, it's 1,200 acres in Middleboro. It's not until October 17th. Why? They're doing some testing and doing some, you know, environmental assessment so that we can have a handle on it both for the seller and for all the potential buyers. I mean, it'll end up being the biggest land auction that's ever occurred in the state. 1,200 acres is a lot for Massachusetts. - Suppose someone has gone to a real estate agent and they say, well, you know, you got a problem with your septic system. I mean, you're gonna have to spend a ton of money here. What would you say is that the kind of person that should go to you as an auctioneer? - The septics are a funky thing. And the big reason it's a super funky thing, especially, I know I keep coming back to the Cape just 'cause that's where generally I'm looking at my window of my office, even though we travel all over the Northeast, is there's a lot of sewer lines coming in. So there's been difficulty with people making a decision of putting in a new septic system when there's a sewer line coming down in the next two to five years. - Right. - So that becomes problematic. So the thing I'll tell you is, in a traditional listing, it's tough for a seller to list it for sale with a broker and have it say, "Septic fails buyer's responsibility." It's a turn off. It's not customary. You'd say, "What the heck else are they hiding?" In an auction, it's like, "Hey, here's the failed report. Check it out. It is what it is. We're selling it as is. And when you sell as is with no contingencies at auction, it's customary. So it's not out of line or out of bounds 'cause that's the process. - How about work that was done without permits? That's another red flag in a traditional listing. Is it not? - It is. And I've had two in this past year, maybe one of your clients where not only has work been done, but the assessor's card for the municipality is wrong because of the work that's been done. So I have a house that the town says is a two bedroom house and I go in the house and now it's four bedrooms 'cause they put one in the garage and they built one downstairs. And I'm sure no permits were pulled. So then we have to market and say, two bedrooms per assessor, four bedrooms in actuality, selling as is. - Can I be on the outdoor, right? - That's how the state operates. I just wanna fine-tune on one other piece of this related to the deal is when a broker says, "I have a cash offer." So a broker brings a cash offer to a seller. How he can't truly be a cash offer. And here's why. Because it's still going to be subject to a mutually agreeable PNS agreement, which then is a contingency and a negotiated deal. When I say I have cash buyers, they are cash buyers. They're bringing a big bank check. They're signing it over at the auction. It is non-refundable. If they don't perform, they lose it. It's kept by the auctioneers and the sellers and then we sell it to the next person and everyone makes more money. It's a pain when it happens, but it can happen. Probably 2% of the time it could happen. So we really have true cash buyers and true cash offers because every negotiation is removed. Including a mutually agreeable PNS, which I think, again, is a huge stumbling block. - Where do people go if they wanna learn more about JJ Manning auctioneers? - They can jump on the website at jjmanning.com or they can call the 800 number, 800-5-2-1-0-1-1. My front man is Charlie Gill. He's fantastic. You met my dad before myself in 2009 and is one of those, I call him Wizziwig. What you see is what you get straightforward. If something's mentioned and agreed upon, it never changes and those are the only type of people, actually, since I turned 40, that's the only type of people that I'll deal with. - You know, a lot of people are used to dealing with brokers and they do it in a traditional way and they know that if they don't get their price, they can sit on it for a while. So I know that some people are gonna be very apprehensive as the day of the auction nears. They're gonna be scared that they're not gonna get the money that they want. How do you reassure them? - So the reassurance comes in information and reporting. From the day they sign on, every single Tuesday, leading up to their auction, they're gonna get a report from our office. Not 'cause they're special, everyone's special. Everyone gets a report. They all, I just saw them all come through my phone before coming into the studio here today and it's gonna tell you how many people visited your webpage, how many people clicked on your brochure, how many people downloaded all the honeydo list, how many people looked at it on Facebook, how many people looked at it on Instagram, how many people looked at it on Zillow, and then all the names of the people that called us or emailed us during that timeframe. So what that does for our office is make sure, on our end, we know the marketing's working and for the seller, it starts to give them how is some peace of mind. The other thing that gives them peace of mind is two other items that can occur before the auction. Brokers can register their buyers ahead of time to earn a commission and they give us an opening bid. And if it's not a foreclosure, it's a private sale, which is the majority of our auctions, they can present a pre- auction offer. It's under the same terms as the auction, it's on the same PNS that's gonna be used at the auction, it has no contingencies, it's the same deal, it's just a bid that came in early. And then the seller at that point can either take it and if they don't wanna take it, it's a nice barometer to know where at least one party is. And then for the auctioneer, I know at auction day, they'll come back and I know they're ballpark. It'll help me be a better facilitator of the actual auction. So there's no particular risk in selling through an auctioneer as opposed to a traditional real estate broker? No, I think that when people contact us and say, "I want you to guarantee me a price," I say, "I'm gonna guarantee you the price that the market will pay for your asset as is today." And so those people, if they're not okay with that answer, they're gonna list it howie for some time and then once they do two or three price reductions, then come back to us. And then it's harder for me to help them because they've lowered the ceiling and maybe we could have gotten everything they hope for the first round. Give me just quickly a couple of examples of people who've got property listed that are howie car show listeners. We've sold them all, howie. (laughs) So when we just jump back and say, "The first year we started working with you, we had over," and this goes back to your point as far as people's understanding or trepidation or understanding of auctions. We had like 215 leads that came in the first year that we were working with you. And I think that ended up turning into about 14 auctions, all of which sold. One was a restaurant in Chaplin, Connecticut, and then all the way to a two family in Watertown Mass. What does that say? It says that about 7% of the leads that came in became auctions that sold and that a lot of people either don't understand, aren't ready, are nervous, that's okay because in our general business ongoing, it's maybe around 10%. So it's right in line. It's just that I will say that at the moment, summer's a funny time. We've had probably more calls from your listeners in the last two months that we have had in the last year because now it's time to sell. But a lot of them are also on vacation, having a few drinks, doing over when we should, and we keep coming back saying, the election's coming, just list it now. We'll get you the best money that you're gonna get in a while. So in other words, don't wait till spring. This may be a good time given the political volatility. I think that now is certainly better than December, January, February. And after COVID, I've quit predicting what is gonna happen with anything because everything happened opposite of what I thought it was gonna be. So I would say that knowing that even with the mass exodus as outlined in your article in the Herald the other day, I think that now is as good a time as any better than this winter and probably better than next spring. And if you're ready to sell, then why wouldn't you wanna get that monkey off your back sooner than later? - Thank you, Justin Manning for being with us. And I just wanna say that if you listen to this podcast, if you've listened to it and you want to sell your property, you make the decision to sell with JJ Manning. By the end of 2024, you will get a special dinner with me. That's your special Howie Car Meet the Experts deal. Just mention this podcast when you call Charlie Gill, that give us the number. - 800-521-0111. - Or you can go to jjmanning.com, jjmanning.com. Justin Manning, thank you so much for being with us here. Is there anything else you wanna say as we check out here? - I guess what I'd say is I don't want anyone to have any trepidation, and certainly it's not like we're trying to sell you a car. We'll walk you through the process, educate you, and get to know you a little bit. And if you're comfortable with the process, we'll be comfortable with getting you the cash value for the property today. - All right, thank you, Justin Manning, from JJ Manning Auctioneers. - Thanks for joining us on Meet the Experts with Howie Car. We'll be back soon with more interesting guests. You're sure to learn a great deal from. (gentle music) (upbeat music) [BLANK_AUDIO]