How many bids did you say?

It's no secret that the real estate market is being challenged with a lot of foreclosures as well as a growing number of homeowners facing foreclosure.

Lenders don't want to foreclose and take back properties because it's a big liability for them. One option they offer is to give a discount on what is owed to them so it's easier for the seller to find a buyer. This is commonly known as a "short-sale".

The challenge is for the lender to figure out how much a property is truly worth. They usually pay for BPO's (Broker Price Opinions), but as the title suggests it's still just an opinion.

There is a solution that is gaining popularity quickly. Real estate agents with clients facing foreclosure, are starting to use online bidding to help the lender determine true market value of a property while also finding a buyer.

As a lender, there isn't anything more convincing than being presented an offer in a short-sale situation for a property that has been marketed for 2-3 weeks and has received over 100 bids.

The lender, homeowner, seller and Realtor all benefit from this process. No wonder there is a growing number of agents using this process.

A window of opportunity

A successful auction requires a motivated Seller.

With that in mind, have there ever been more motivated Sellers than there are right now as a result of the sub-prime mortgage mess? Are you losing business in your own home territory to out-of-town auction outfits snapping up and auctioning off hundreds of properties at huge ballroom live auctions?

Do you know your local area better than they do? Do you think you could out-sell them on price?

Is your hometown littered with pre-foreclosures and the chance for short-sales, as well as bank-owned repossessions?

Auctions have long suffered the connotation of "distress sales." Well, that's what we've got at the moment, and who knows how long it will take for the market to come back into balance.

Auctions aren't the problem, but they are proving to be the best solution for all concerned.

How do you get your piece of this huge pie? By offering online bidding on your website and going after these distressed properties in particular to get started.

We believe the perception of auctions as strictly "distress sales" will fade away as market conditions change and online bidding becomes a vital tool for traditional Realtors.

In the near future, auctioneers will certainly continue to have auctions, but conventional real estate agencies will offer "online bidding."