Why Buy a House When You Can Own the Whole Town?

Dec. 14, 2005 — -- Right in the middle of Tortilla Flat, you'll find a saloon, a gift shop, a post office, a general store, and a restaurant serving burgers, ice cold beer and buzzard strips (known elsewhere as fried chicken).

With amenities like these, as well as spectacular views of the Superstition Mountains, the residents of this remote Arizona town can't imagine living anywhere else.

And anyone who wants to buy the whole town -- available for just $5.5 million -- can move in and raise the population to seven.

The online auction site eBay has offered buyers the chance to bid on everything from the original Hollywood sign to a grilled cheese sandwich with the Virgin Mary's likeness. In recent years, eBay has also become the go-to site for buyers and sellers of towns like Tortilla Flat.

So if you're considering buying or selling a small city, the people who have bought and sold towns on eBay have a few recommendations for you.

"I wasn't particularly interested in buying a whole town," said Bruce Krall, who in April 2004 found himself the new owner of Bridgeville, Calif. "I was interested in developing a unique, learning retreat type of resort. A place like that would have to be out in the sticks."

After it appeared on eBay in 2002, the bidding frenzy for Bridgeville created an international media sensation, pumping the price up from the original $750,000 asking price to $1.78 million. After reading about the phenomenal bidding war, Krall visited the northern California town.

"It's absolutely gorgeous. The setting is spectacular," Krall said of the riverside town, nestled in the forested hills of Humboldt County. Within hours of seeing the place, the 46-year-old financial adviser made the seller an offer and a deal was struck that weekend. He had all the recommended inspections performed and bought the town for just $700,000 -- well below the eBay auction price.

And the story of how Bridgeville was sold is a cautionary, and typical, tale of eBay real estate transactions: a seller places a town for sale on eBay; intense media attention is lavished on the event; no serious offers come forward; the auction closes; and no sale is completed.

Krall bought the town months after the online auction had closed. The bidder who won with his $1.78 million bid later got cold feet and backed out of the deal.

"What a fiasco that was," said Denise Stuart of California Real Estate in Eureka, who brokered the Bridgeville deal throughout the lengthy eBay bidding process and the eventual sale to Krall.

"Both my phones -- my landline and my cell phone -- rang nonstop. There was no time to deal with anything else," she said of the process, which consumed several months of her life.

Surprisingly, though, Stuart has no real regrets about the eBay phenomenon. "I think it was a good experience. It was a learning experience," she said.

"Though it did not sell through the auction, it got a lot of attention because of the auction," Stuart admits, and the media attention is what ultimately attracted Krall.

As a buyer, what was different about Krall? He was more methodical, according to Stuart. "Bruce took the time to do all of the inspections and everything he needed to do," Stuart said.

Just downstream from Bridgeville on Highway 36 is the tiny hamlet of Carlotta, which was also for sale on eBay in 2003. And east of Bridgeville on Highway 36 is Platina, a former platinum mining town, which eBay posted for sale that same year.

These three for-sale towns are forever joined in eBay notoriety with Langtry, Texas -- former home of Judge Roy Bean -- the dusty outposts of Amboy and Minkler, Calif.; historic Rocky Ford, Ga.; Monse, Wash.; and the ghost town of Palisade, Nev.

Besides being offered for sale on eBay, what do these towns have in common?

All are located in isolated rural areas; none has a population over a few hundred. "Fixer-upper" would be a generous way to describe the buildings still standing; in Bridgeville, several of the houses and buildings were deemed by the county to be uninhabitable.

The towns are generally owned by older individuals or couples who are no longer interested in the expense and upkeep required to keep the towns operating. And none has what could be called a dominant industry or viable economic engine.

There are exceptions: "The bad thing about a lot of them is, they don't generate any revenue -- this one does," said David Levi, owner of Tortilla Flat. The town, originally a way station for water and horses, still retains some vitality because of its operating restaurant and shops.

"We got a lot of free advertising," Levi said of his eBay listing. "We had a big response. It went around the world -- England, France, and there was even a Russian film crew over here."

But Levi, who says he is not aggressively looking to sell, has yet to find a serious buyer, something he also has in common with most other eBay sellers of towns.

EBay operates the real estate section of its online marketplace in much the same way it operates all other sections: strictly hands-off.

"Whether you're selling a postcard from a town or the town itself, we really don't get involved," said Hani Durzy, spokesman for eBay. "We're merely a marketplace or a venue for these kinds of transactions."

But not all eBay transactions are the same, Durzy explains. "There's a format that exists in real estate that doesn't exist in any other section -- the advertising format." Unlike sellers of World War II submarines or human kidneys (both have been offered), real estate sellers can use eBay to announce the availability of their property without accepting any bids.

"Sellers can use eBay to connect with potential buyers or to find the fair market value of their property," explains Durzy. And especially when an entire town goes up for sale, "it becomes a pop culture thing."

Sellers also have the option of screening potential bidders or buyers. "We don't pre-qualify, but sellers have the ability to do a vetting or a bidder pre-approval," said Durzy. Sellers can require that all interested parties provide a credit check, a deposit or simply talk on the telephone before proceeding.

Durzy recommends that buyers and sellers proceed with caution. "In real estate, it's important for both the buyer and the seller to remember that the laws governing real estate transactions in this country still apply. It doesn't excuse you from doing the same due diligence you'd have to do in any other real estate transaction."

And, in case your enthusiasm for buying a town exceeds your common sense, Durzy has one final bit of advice: "Go visit it."