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. . . But to a Lucky Handful, Misfortune Is Rewarding : Certain businesses thrive during hard times; so do certain people. Here are a few who happen to be in the right job at the right time. : The Auctioneer

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On a stinging cold Sunday in this old farm town, Don Kennedy faces a sea of hot prospects in a packed banquet hall at the Red Lion Hotel.

A three-piece band plays frisky pop favorites. A few doors down, the Modesto Blind Bowlers Assn. holds a holiday fund-raiser.

But charity is far from the hearts in this room, crowded with balloons, a bar and the hubbub of 40 staffers, 230 bidders and various friends, family and hangers-on about to contend in a public auction for 42 homes at cut-rate prices.

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Downstairs, in a room jammed with card tables, loan officers are poised to slide the winners into escrow in as little as 90 minutes.

But that comes later, after the rapid-fire ministrations of Kennedy, a star tenor of marketing and arguably the best real-estate auctioneer in America.

“Auctions have been around forever,” he often says, a conscious heir to tradition. “They auctioned Christ’s clothes after they put him on the cross.”

With the market for homes and offices prostrate and conventional brokers going broke, Kennedy has moved $400 million worth of real estate this year. His Santa Monica firm, Kennedy-Wilson Inc., says sales are up more than 200% over 1990, to $778 million, making it easily America’s largest real-estate auctioneer.

This is still a modest chunk of the $720-billion U.S. real-estate market. But Kennedy-Wilson predicts only more growth as it preaches its gospel of selling new homes and condos in rented rooms staffed with yelling floor men.

“People now realize that it’s just another way to market real estate,” says Kennedy, resonant even in conversation.

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On to business. He breaks into a melodious auctioneer’s chant shortly after 1 p.m.

The first house--two bedrooms, two baths, 1,349 square feet--is listed at $152,990. It quickly climbs from the $75,000 minimum bid and Kennedy shouts “Sold!” at $124,000.

“That was my house!” sighs Charlie Bracco as he stops bidding at his limit--$1,000 short of his favorite’s sale price. A walnut farmer here to pick up an investment or two, Bracco will go home empty-handed.

Bidders clearly have done their homework, and most have vowed not to get carried away in the excitement--which at one point will include a floor man who announces a higher bid by flinging himself into the air like a demented marionette.

Tao Ching Bee, a local restaurant owner, will buy. He and his family are soon signing the papers on a house they snagged for $139,000--$4,000 more than they’d hoped, but well below its former asking price of $175,990.

In some parts of the world, particularly Australia, England and Ireland, auctions are the home-sales method of choice. Elsewhere, oral auctions are usually used mainly to dispose of troubled properties.

Kennedy-Wilson believes that is changing. In 1977, two experienced auto and antiques auctioneers, John Wilson and Kennedy, formed Kennedy-Wilson to apply the technique to real estate. William R. Stevenson, a Los Angeles real estate assets manager, took over in an amiable buyout almost three years later and developed the meticulous marketing process that now precedes the auction itself.

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For a negotiated fee--often equivalent to the usual 6% that brokers charge--the firm advertises, prints brochures, explains the process to novice bidders and conducts the sale on auction day.

Buyers are lured by the prospect of picking up property cheap. Developers like the way an auction extracts their money from a project, relieving them of construction loans and other charges, particularly in a slow market.

Here in Modesto, the homes rapidly changing hands to a chorus of “Sold! Sold! Sold!,” are the last of a tract built by Newport Beach-based William Lyon Co., a major California developer. They have been waiting for buyers for almost a year.

Now, just three months after the builder contacted Kennedy’s firm, his mesmerizing chant has fallen still--42 sales and $5.7 million later.

The night before, Kennedy predicted that the auction would take an hour and 20 minutes.

In fact, it took an hour and 18.

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