Do buyers bid online for real estate?

I get this question a lot. ..

Do buyers bid online for real estate?

The answer is yes and it's becoming more and more common.

As you know 90%+ of buyers are already finding their homes on the Internet, so it's a natural next step to negotiate with all interested buyers simultaneously online.

As a listing agent, an online auction is just a different marketing strategy. They naturally attract more buyers and help a property stand out.

They do take a planned marketing effort, but it can be well worth it.

Interested in learning more? Join our next online real estate auction training session.

Auction.com - Are you watching?

A couple of weeks ago I noticed a new sign in the front yard of an REO property I was showing from real estate auction company REDC - website Auction.com

I called the listing agent and found out that the bank that owned the property had turned it over to REDC to sell through their online auction process.

Whether on purpose or just too much going on, the listing agent never updated the MLS information and since this property was at the end of a cul-du-sac I think very few people knew about the auction.

In addition, the payout from REDC to a buyer's agent is 1%, so I imagine very few buyer's agents working with buyers even let their buyers know about these.

It was last listed in the MLS at $194,900 and the opening bid was $69,000.

This property was not like many of the REO's I've looked at. The bank had actually spent money replacing all the carpeting, painting and putting in new vanities and toilets in all 3 bathrooms. It was a very nice 4 bedroom home in a great area of west county St. Louis.

My buyer won the bid at a great price and now we are just waiting on confirmation from the seller (bank).

But, what's the opportunity?

REDC is a huge auction company selling tens of thousands of homes across the US through their auction process, but what seems to be missing is the local marketing for these properties.

This is a great time for the local broker to get up to speed on using an online auctions to market their listings and provided that needed local customer service that is missing from the REDC auctions. Join us to learn how

Lighting a fire under the buyer!

A couple of weeks ago, I was working with a real estate agent on her first online auction.

The seller was a widow who had equity in her home, but could no longer keep up with the payments or the size of the home. The house had been listed for 6 months with no offers.

They wanted to try something new, something to get attention and motivate buyers to make offers so I helped them market it through an online auction.

We put up signs, mailed post cards to the neighbors and put up fliers in the local businesses.

The marketing attracted interest, but more importantly the process lit a fire under a buyer who had previously viewed the home. They didn't want to compete with other buyers so they wrote an offer that was accepted before bidding opened.

This is not unusual as I've seen about 20% of the properties I market through auction get a "pre-auction" offer before bidding opens.

There is something to be said about being able to create urgency by setting deadlines like the auction process does.

It's definitely a unique, powerful and exciting way to sell real estate.

You're welcome to join our next training session where we discuss the online real estate auction process in more details. Register Here

Online Auctions - Not for the lazy Realtor

This past week I was teaching a class of auctioneers & real estate agents how online auctions work, some advantages & disadvantages, etc.

While there are a lot of efficiencies gained by using an online auction vs. a live "on-site" auction, the class observed that an online auction still requires more effort than most Realtors give when marketing one of their listings.

I agree, there is more effort involved, but not much more, which leaves a HUGE opportunity for progressive agents willing to put in that effort.

Interestingly enough, all the agents I'm currently working with have sellers so excited about the concept that the sellers are giving them upfront fees to do an online auction for them. This is more evidence of the demand in the market for this service.

If you don't understand the online auction process or even where to start, I can help you too. We hold a webinar each month that explains everything. I hope you can join us. Register Here

An online auction gives you 3 ways to sell

One of the many benefits of using an online real estate auction to market a property is that it gives you 3 ways to sell the property during the process.

1st way (Pre-bidding): Instead of letting people bid on the property as soon as it goes online, you can advertise it in a "preview" mode before bidding opens. By having it in "preview" mode for 7-10 days before opening the bidding, you create the urgency for buyers to submit a written offer and get it under contract so they don't have to compete. The seller can accept a pre-bidding offer and cancel the auction before online bidding opens.

2nd way (Online bidding): This is the most obvious. At the end of the online auction, the high bidder puts the property under contract as expected by the terms.

3rd way (Post auction): If for some reason, the bidding doesn't meet the reserve price, the auction process will have produced a list of buyer leads interested in the property. You can contact all of them, let them know the seller is interested in the highest and best offer they are willing to submit.

If you'd like to learn more about this process join our next online real estate auction training session.

Why would I do an online auction?

"Why would I do an online auction?" - I get this question a lot from real estate agents who are not familiar with using online auctions to market and sell their clients property.

Here are the top 10 reasons....

10) Nobody's been through the property in weeks.

9) You're tired of the seller complaining that you are NOT "doing anything".

8) The seller has moved out and is making 2 house payments.

7) The seller is facing foreclosure and needs an offer for a short sale.

6) Your seller insists you keep doing open houses EVERY weekend.

5) You want to be able to offer something other than another "price reduction".

4) You seller doesn't want to hear about another price reduction.

3) You are an "innovative" Realtor who offers better solutions than your competition.

2) You and the seller just want an offer....ANY offer, PLEEEEASE!

1) You know everything you need to know about running your own online auction because you attended our online auction training event.

Why use an Online Auction?

Do you consider yourself a progressive real estate agent who keeps up with technology? Are you using online auctions yet?

Here are some of the advantages/reasons to look at adding online auctions to your services.

Reason #1: It's a Quick Sale
An online auction gives the owner an opportunity to sell at today's prices and not wait for a buyer to bring an offer.

Reason #2: High Carrying Costs are Avoided
All property incurs costs during it's marketing period. By accelerating the sale the owner will substantially reduce the holding costs such as debt service, taxes, HOA fees, insurance, maintenance, etc.

Reason #3: Property Market Value can be Demonstrated
Instead of relying on the appraiser to assign an asking price, the auction process demonstrates the value of the property to the sellers and potential buyers. Selling a property using the traditional method, you may wonder whether you could have bargained higher. If a property is sold at auction, the proof of the market value is in the process itself, the selling price is truly market-driven.

Reason #4: Auctions Receive Maximum Marketplace Exposure
The marketing time frame for an online auction is more condensed than in traditional methods. Additionally, buyers are naturally attracted to auctions because they are different. They stand out and buyers become curious. Buyers don't want to miss out on a great deal so they visit the property.

Reason #5: An Urgency to Buy is Created
An online auction has a specific ending date/time. A sense of urgency is created: "buy this property today, it won't be here or available when the bidding ends". It forces hesitant buyers to act.

Those are some of the main reasons, to learn more about using online real estate auctions join us on our next training session.

Have you heard of online bidding?

Yesterday I had the opportunity to talk to a group of Coldwell Banker Agents at their office in Kirkwood (St. Louis, MO area).

It was a great group and I was able to share how online bidding works and how they can offer it as an option to their sellers.

Almost everyone had no idea this option was so easily available to them and there were lots of great questions. Here are some of them...

Q: Is the seller forced to sell to the highest bidder?

A: No, the most common practice in the industry is to state in the auction terms that "Winning bid is subject to seller approval". In the case of a short sale, "Winning bid is subject to lender approval".

Q: How do people find out about the online auction?

A: Marketing is key. Yard signs, flyers, postcards, Craigslist, MLS, etc. Most agents do some sort of marketing campaign around a new listing, you would want to do the same thing for an online auction.

Q: How long should an online auction last?

A: In general 3 weeks or less, but it can depend on the property and marketing campaign you have planned. I've seen online auctions done successfully in as little as a week.

Q: Do people buy a property site unseen?

A: It does happen, but it's rare. You have to expect to hold at least 2 open house "previews" during your marketing period so buyers have easy access to see it. Open house previews should be 2 hours or less so you can get multiple buyers in at the same time, creating competition.

Q: Aren't auctions just for distressed properties?

A: Not anymore. Cher recently sold a property in Hawaii she owned at auction, pocketing a $2.5 Million profit. Check out this beautiful property in Texas up for auction.

Overall, it was a great group of agents with great questions and now they have an additional "tool" they can offer their clients.

If you'd like to have this additional "tool" too, register here.

Where is all the action?

Real Estate Auction = Action

You've probably noticed that real estate has changed radically in the 2000s. One change is the new role of real estate auctions as a useful effective selling tool, a viable supplement to yesterday's private negotiated, put a sign out, run an ad, wait for the phone to ring, one on one, marketing efforts.

To make an auction even easier, faster and more accessible to today's buyer, the Internet is becoming the preferred method for conducting them. Buyers can participate from wherever they have access to the web, and today, that's almost everywhere.

The Internet also opens up auctions to real estate agents as an additional selling tool for their customers. The agent can run an auction themselves without coordinating a "live" event or learning the auction chant.

To me, the biggest benefit is the reduced time frame to market and find a buyer. Live auctions typically take 30-60 days to market and coordinate, but with an online auction, some agents are doing them in as little as a week.

Interested in learning more - Click here to register for our next online auction training session.

The Real Estate Auction

Growing Trend
Once considered only a last resort for disposing of distressed property, the auction process has grown in popularity and is the fastest expanding segment of the real estate industry. If current trends continue as predicted by national real estate experts, within this decade more than 30 percent of all real estate sales will be conducted by auction!

Rewarding
As an "event", auctions have proven to be both convenient and successful, even in our current market. The auction process itself is interesting and captures a lot of attention, often turning "spectators" into "participants" as they become more familiar with the process. Now with the addition of online bidding, participation has increased even more.

Nothing New under the Sun
There is certainly nothing new about the auction process! Auctioneering had its roots in ancient times and has played a vital role in the evolution of commerce as we know it today. The first documented auction was reported in 500 B.C. by the Greeks.

From the Seller's Perspective
The resurgence of interest in the auction process as a desirable and profitable method of marketing real estate has much to do with as many advantages to the seller, many of which relate to the time/money equation.

What most real estate brokers/agents don't know is that they can learn how to do online auctions themselves. Join us on Thursday to learn more - Creating Urgency & Demand with Online Auctions

What, this isn't a seller's market?

A few weeks ago I was working with a new customer, a real estate agent in Las Vegas, on a condo he was marketing through an online auction.

Typically we put a listing up in a "preview" mode for a few days before we open the bidding. The idea is to flush out a written offer and, if good enough, cancel the auction.

Well, that's what happened, a buyer's agent brought him an offer that was decent and within the range of what the seller wanted to get.

However, my customer, the listing agent, was a little disappointed because he really wanted to go through the online bidding process to see how it worked. So, he talked to the seller and they both agreed to reject the offer knowing that they might not be able to go back to it if things didn't work out. This isn't something I advise, but they wanted to do it so I didn't argue against it.

Well, the decision worked out well, there were several other buyers who were interested and the winning bid online came in at just over $5000 more than the written offer. As you can imagine the seller thinks the agent is a hero and she can't wait to have him market her next property she rehabs.

As an added item of interest, the winning bidder was from the east coast. They had never seen the property, just the pictures and information online. This is definitely not typical as the online bidding usually takes place between local buyers who have visited one of the open house previews. However, it is an example of how holding an online auction reaches a bigger buyer pool and helps increase the competitive bidding.

If you're interested in learning more about using online bidding in your market, you can join our next online real estate auction webinar.

Do you hold open houses to sell land?

I was recently coaching a RE/MAX agent who was using our online bidding system to market a 4 acre piece of land in the St. Louis area (St. Charles).

Most of our customers are selling homes so it was a little different but not unique.

When selling a home I teach that you need to schedule at least 2 open house "previews". By having an open house "preview", you get all the interested buyers in at the same time which creates competition, nothing new there.

So, this RE/MAX agent decided he would try an open house for his land. Honestly, I thought it was a waste of time, but I was also curious so I didn't try to talk him out of it.

The second thing he decided, was that he would do it on a Wednesday from 11am - 1 pm. I also didn't think that was ideal, but I still didn't try to talk him out of it.

The results... 5 interested buyers came out during that Wednesday to walk the property with him and ask questions. This a property that had been in the MLS for 8 months with very little interest. And 5 may not seem like a lot, but he and I both thought it was amazing to get that type of response under the circumstances.

Once again I learned something, which I do every time I help someone use the online bidding process.

And the final results... It received 16 bids with the high bid being $105,000 and it actually just closed escrow last week.

If you're interested in learning more about how this online bidding process works, join our next Real Estate Online Auction Webinar

2 weeks and no calls to show my listing!

I was talking to a Realtor yesterday who told me she listed a property 2 weeks ago in a nice area and a good price and has had no calls to show it. The seller is very motivated and just wants to get rid of it.

I know this is not unique, but what do you do?

One of the things missing in today's market is a sense of urgency for buyers to act. Sure the government tax incentive helped a little, but now what?

Remember the days of multiple offers and offers that went above listing price? That sure was a lot more fun.

So, is there a better way to create a sense of urgency and demand for a listing?

Yes, there definitely is and I've seen it work many times. It's online bidding and it involves taking a listing and marketing it in a non-traditional way. Marketing it in a way that sets scheduled open house previews with no other access (gets all the buyers in at the same time), setting a limited time for buyers to make an offer (usually 2 weeks or less), open competitive bidding so all buyers know the highest offer at all times and providing an interactive engaging online bidding experience.

This is still new, but it's a lot easier than you would expect and think of the control it gives you and the value you can provide the seller who just wants to move one. You now have a solution that can get them the highest offer quickly.

If you're interested in learning how you can use this strategy in your market, RSVP for our next webinar.

It will open your eyes to a whole new world of possibilities!

Short sales: I need the highest offer quickly!

Short sales are a lot of work and if want nothing to do with them, I don't blame you.

However, for the listing agents actively involved with them, I discovered a better way to get the highest offer for the lender quickly.

I've seen lots of different strategies, but an open/online bidding process seems to be one of the best options out there today. The process puts a deadline on submitting offers (like HUD homes) but it keeps a fair playing field for all buyers by letting them know the current bid price. This can actually drive up the price and create a heated bidding war as it ends. At completion, the high bid also comes with all the bid history to help substantiate a "fair market value" for the lender.

Here is a simple overview of the process...

1. The property is marketed using an online bidding platform (in coordination with the MLS) for as little as 1 week. It includes holding at least 1 open house preview, preferably 2. In the auction terms it MUST be clear that the high bid is subject to lenders approval. The online auction makes it simple for buyers and their agents to submit offers and it's all automated (No more juggling multiple offers and all the paperwork involved).
   
   
2. When it ends, the high bid is written up as an offer and presented to the lender. In addition, the agent also explains to the lender how the property was marketed through an online bidding process, and they provide stats such as number of people who visited the property, number of bids, number of people bidding, etc. This will help the lender realize the highest bid is "fair market value".
   
   
3. The short sale process is managed as normal, but the agent can also follow-up with the non-winning bidders and sell them other properties.

A real example...

I recently worked with a RE/MAX agent to use this process in St. Louis. The property being sold was not a short sale situation when he took the listing, but after several months of not being able to sell it, the sellers situation changed.

He was able to use the process to get several buyers interested in it by starting low and having them bid online. When it was over he brought the highest offer to the lender (a local lender) and they felt the process got them a fair price so they approved the short sale and it closed in about 6 weeks.

The agent, seller, lender and buyer were all happy with the results. A win-win-win-win.

SOLD in 7 days or less!

I've been involved with using online bidding to sell real estate for about 5 years now. The strategies have changed as I constantly learn new marketing strategies and how to work best with the MLS.

In general an online auction usually runs about 3 weeks. The idea is to give it enough exposure and have time to have 2-3 open house previews.

Recently I've realized that with the right marketing strategy and processes in place, this could easily be reduced to a week or less.

Here is what it could look like....

Day 0 (Sunday night) - Listing goes active in the MLS and online auction is in "preview" mode (bidding not open yet)

Day 1 - 4 - Heavy marketing using online ads, signs in the yard, flyer box in the yard, and anything else you use to advertise in your local market. NO Showings allowed during this time.

Day 5 (Friday) - This is the first day that agents can show the property to their buyers, but online bidding is not open yet. Written "pre-auction" offers are allowed until 7 pm Friday night.

Day 6 (Saturday) - If the seller has not received & accepted a pre-auction offer, the first public open house is held for 2 hours sometime in the afternoon. Online bidding opens immediately following the open house. When online bidding opens, it is mandatory that all offers/bids be submitted online.

Day 7 (Sunday) - The second scheduled open house is held for 2 hours sometime in the afternoon. Online Bidding ends at 9 pm Sunday night. The highest bid is presented to the seller for their approval or counter.

That's it on the high-level. The process creates a sense a urgency missing in today's market and gives you a new option for sellers in the right situation.

I know it will work, but I need agents with listings that want to help prove it out in their market.

If you're interested, give me a call at 636-527-3439.

Is Craigslist an effective source of buyers?

I'm sure you've heard of Craigslist and maybe you post your listings on it on a regular basis.

As of right now, there is no automated way to post your listings on Craigslist, you have to manually post every listing yourself. This is actually a good thing otherwise the number of posts would be overwhelming and buyers would probably stop looking.

Since it's a manual process and will take time every couple of days to keep your listings fresh, it's even more important that the ads you post are effective.

You want to get the maximum number of buyers to act when they view your ad by calling you or going to your website or both.

You want to know the number of buyers viewing your ad and clicking through to your website.

You want to minimize the time it takes you to manually post your ads.

If you agree, you'll be interested in the new Ad Maker Tool that's just been released.

Upcoming Webinar Demonstrates the Latest Advances in Online Real Estate Auctions

Upcoming Webinar Demonstrates the Latest Advances in Online Real Estate Auctions

Why doesn't anyone notice you?

Could it be that there are so many real estate agents to choose from, that the general public can't differentiate?

Maybe it's time to stand out and do something different. Using online real estate auctions to market and sell properties is one of the things you can do. It's new, different and exciting. It will definitely get you noticed.

I've spent the last 5 years using online real estate auctions and here are some answers to common questions about them.

Q) Aren't auctions just for properties that need a lot of work?

A) No, not anymore. Auctions are now being used for brand new properties from builders and banks. Owners of any type of property, who are motivated to sell quickly, are turning to auctions for a solution. Celebrity Cher just sold a property she owned in Hawaii this past January via auction for $8.7 Million.

Q) How long does an online real estate auction last?

A) Typically about 3-4 weeks. However, the speed of information is so fast and technology so good, that one real estate agent does it in only 2 days. It all depends on how fast you can execute your marketing campaign.

Q) Do I need a special license to do an online auction?

A) In every state, you need to be a licensed real estate agent to sell any property other than your own. Each state has different rules. New Hampshire, Rhode Island & Georgia are the only states that I know of that require you to have an auctioneer's license to hold an online auction.

Q) Aren't online auctions just a fad that will go away when the market gets better?

A) I don't think so. I think there are more auctions today than ever before because of the current market. However, I also think they provide a solution that is needed in any market, and sellers will find they are an excellent option for a property in high demand too. If you've ever sold a property where you received multiple offers, think of how much fun it would be to have them bid it out online. What owner wouldn't want to have motivated buyers bidding against each other for their property?

The other thing to realize is that the Internet is never going away. Our society gets more tied into it everyday. Almost everyone looks for properties online today, being able to make a bid online is the next logical step. Online bidding for real estate will change the traditional list & wait for offers model.

If you want to learn how you can use online bidding for your listings, join our next webinar Real Estate Online Auction Success

Let the bidding begin!

When it comes to selling real estate, there isn't anything more exciting than watching a bidding war take place over your listing. The seller is excited, you as the listing agent are excited and the buyers are excited to participate.

The above condo listing in Las Vegas is a great recent example. The seller had newly rehabbed this property and the winning bid well exceeded their "bottom line" price. At the same time the winning bidder got a good deal compared to other sales in the complex.

The important thing to remember when selling using an online auction is that you need to have scheduled open house "preview times" as well as good signage and marketing to let buyers know about it. Buyers in today's market are looking for deals and the "auction" activity draws them in.

If you're interested in seeing more details about this auction Click Here

I'm not selling to the highest bidder!

When it comes to online real estate auctions, there is still a lot of confusion among real estate agents on how they work. Here is another myth...

Myth: If I use an online auction, I MUST sell to the highest bidder.

Truth: Most online and even "live" auctions are done using a hidden reserve or “Subject To Confirmation”. In either case, the seller and agent are protected and not forced to sell if the bidding doesn’t get high enough. An "absolute" auction is the only auction type that requires the seller to sell at the high bid. So, unless, you see the word "Absolute" in the marketing of an auction, there is a reserve.

When an auction is marketed correctly, the process brings true market value for a property. Even in the case where that price isn't as high as the seller had hoped, you can use the online bidding process to help the seller see what buyers are willing to pay.

Right now, I'm seeing more and more online auctions used for short-sale situations because it's a quick way to get the highest and best offer to present to the lender. The competitive bidding also presents a good case that the highest bid is "true market value".

Make an offer - site unseen?

Here is a common myth or misunderstanding about selling real estate through an online auction.

Myth: Buyers will place a bid at an online auction without ever visiting the property.

Truth: This is extremely unlikely. The success of an online auction depends on buyers having access to inspect the property before placing their bid online. Buyers need to touch a feel a property, imagine living in it before they are willing to place a bid. Access is usually given through scheduled open house “previews”, but can also be done by appointment.

Although it does happen, it's unrealistic for you or your seller to expect that if you use an online auction, someone from another state or country is going to start bidding without ever visiting the property.

An online real estate auction will be successful, when you understand and use online bidding as a way to create urgency and automate negotiation with the local buyers. Buyers who you've attracted through your marketing (MLS, open houses, yard signs, CraigsList, etc.).

And, yes, it does happen that non-local buyers sometimes get involved, but they either have someone locally they are working with or have another means to perform due diligence.

Online Real Estate Auctions in Texas

Real Estate Disposition Corp (REDC/Auction.com) held an online only real estate auction in Texas this past weekend featuring 120 properties.

They reported yesterday that 95 percent of the properties sold for a total of $10.3 million in sales. Not too bad for one weekend and this was just part of their $47.4 million in total sales that includes their other auctions.

The great news for real estate agents in Texas and around the country is that those sales were all done online. No hotel ballroom to pay for and coordinate, no bid calling, just point buyers to the website and let them bid away.

The same technology to use online bidding is available to real estate agents today and it's a great time to take advantage of it.

Short sales: Getting creative

It's no secret that short sales are a lot of work and the reason why many real estate agents don't bother with them.

However, for the ones that do, it's frequently a challenge to get a reasonable offer to start the process with the lender.

One Solution : Some agents are turning to technology, by marketing a short sale through an online auction so they can get the highest & best offer within 2 weeks or less. This approach leverages the auction process to drive the demand and price up while also providing an offer that can be easier to justify because it was determined in an competitive bid situation.

Here is a simple overview of the process...

1. The property is marketed using an online auction platform (in coordination with the MLS) for as little as 1 week. It includes holding at least 1 open house preview, preferably 2. In the auction terms it MUST be clear that the high bid is subject to lenders approval. The online auction makes it simple for buyers and their agents to submit offers and it's all automated (No more juggling multiple offers and all the paperwork involved).
   
   
2. When it ends, the high bid is written up as an offer and presented to the lender. In addition, the agent also explains to the lender how the property was marketed through an online auction, and they provide stats such as number of people who visited the property, number of bids, number of people bidding, etc.
   
   
3. The short sale process is managed as normal, but the agent can also follow-up with the non-winning bidders and sell them other properties.

This is a very simple overview as there are a several other details that make an online auction successful.

If you are involved in short sales, you're welcome to come learn more about this progressive sales strategy. Real Estate Auction Webinar - Click Here

Are You Willing to be a Leader?

Online bidding will become the preferred method for selling real estate in the coming years. Here are some early indicators…

• REDC (Real Estate Disposition Corporation), the largest real estate auction company in the country, now sells more real estate through their "online only" auctions than their live ballroom events. As an example, for the week ending March 6th, 2010 they set a record sales volume of $71M sold and $43.2M of it (over 60%) was sold online.
  
  
• County courthouses around the country are beginning to sell their foreclosures through online bidding. In Dade County Miami they have sold 2,800 properties since they started in mid-January. Broward & Palm County have just announced they are implementing it as well.
  
  
• REDC has partnered with a company in the UK for “online only” auctions. They sold 57 properties at their first event in February.
  
  
• Tulare County – (Near Fresno CA) has just announced their Tax lien sales will now be done through online bidding.
  
  
• RE/MAX International is holding their first “live/online” hotel auction event with 150 homes on April 10th in Denver.
  

Be a Leader & join our next webinar to see how you and your team can use online bidding with your listings in your market today.

Real Estate Online Auction Webinar

Real Estate Auctions Today - What's going on?

Most people are not aware of what's going on with real estate auctions today, so I'd thought I'd share some highlights…

• Celebrity Cher sold a Hawaii property through an auction in January for $8.7 Million

• Ballroom & studio auctions where 100's of REO properties are being sold are becoming more common and frequent in the larger cities.

• The largest real estate auction company right now is Real Estate Disposition Corporation (REDC/auction.com). For just the first 9 weeks of 2010 they have already sold 7,488 properties for a total of $403 Million.

• REDC is now selling more real estate through their online auctions than their live ballroom events. As an example, for the week ending of March 6^th 2010 they set a record sales volume of $71M sold and $43.2M of it (more than half) was sold online.

• REDC just partnered with a company in the United Kingdom to use online bidding only. In their first event this past February they sold 57 properties.

• County courthouses around the country are beginning to move their foreclosure auctions online. The most recent example is Dade County in Miami.
  

• Real estate brokers & agents who recognize the opportunity are going to auction school or partnering with experienced auctions.

• RE/MAX International in Denver has partnered with a local auction company and is holding their first “live” hotel auction event with 200 homes on April 10^th.

If you're interested in learning more about online real estate auctions,join our next webinar

Online Real Estate Auctions - A new option for Agents

After 14 years of working in the computer industry, I was naturally drawn to the concept of online auctions when I got my real estate license. I've spent the last 5 years using online real estate auctions and here are some answers to common questions about them.

Q) Aren't auctions just for properties that need a lot of work?

A) No, not anymore. Auctions are now being used for brand new properties from builders and banks. Owners of any type of property, who are motivated to sell quickly, are turning to auctions for a solution. Celebrity Cher just sold a property she owned in Hawaii this past January via auction for $8.7 Million.

Q) How long does an online real estate auction last?

A) Typically about 3-4 weeks. However, the speed of information is so fast and technology so good, that one real estate agents does it in 2 days. It all depends on your marketing campaign and how many open house "previews" you plan to do.

Q) Do I need a special license to do an online auction?

A) In every state, you need to be a licensed real estate agent to sell any property other than your own. Each state has different rules. New Hampshire, Rhode Island & Georgia are the only states that I know of that require you to have an auctioneer's license to hold an online auction.

Q) Aren't online auctions just a fad that will go away when the market gets better?

A) I don't think so. I think there are more auctions today than ever before because of the current market. However, I also think they provide a solution that is needed in any market, and sellers will find they are an excellent option for a property in high demand too. There are lots of examples on Ebay of a unique item selling for some crazy amount. What owner or real estate agent wouldn't want to have motivated buyers fight it out online for their property?

The other thing to realize is that the Internet is not going away. The younger generation is more affluent with it than ever. They will begin to expect more real estate transactions to move online. Online bidding for real estate is changing the traditional list & wait model.

Many progressive Realtors are already using them in their markets, if you want to learn how to join them, register for our next webinar.

Short sales: Perfect for an online real estate auction

Now, more than ever, lenders are willing to consider short sales when the borrower is in financial trouble and there is no equity in the home. They really don't want to take properties back in foreclosure.

The Opportunity : You can now use an online auction as the perfect tool to get the highest and best offer for the lender quickly.

Here is a simple overview of the process...

1. You market the property through an online auction (in coordination with the MLS) for as little as 1 week. In your auction terms it MUST be clear that the high bid is subject to lenders approval. The online auction makes it simple for buyers and their agents to submit offers and it's all automated (No more juggling multiple offers and all the paperwork involved).
   
   
2. Then, you can take the high bid, write it up as an offer and present it to the lender. In addition, you also explain how the property was marketed through an online auction, and you provide stats such as number of people who visited the property, number of bids, number of people bidding, etc.
   
   
3. Manage the short sale process as normal, follow-up with the non-winning bidders and sell them other properties.

This is a very simple overview as there are a lot of strategies and techniques that make an online auction successful. You're welcome to join our next webinar to learn more. Real Estate Auction Webinar - Click Here

Do online real estate auctions work?

“Do online real estate auctions really work?” is a common question from anyone new to using online auctions to sell real estate.

The answer: Yes, absolutely they work! That's why were seeing a huge shift of auctioneers and real estate agents to adjust their selling strategies and start using them. That's why REDC (auction.com) has added "online only" auctions in addition to their ballroom-style auctions. In fact, REDC's "online only" auctions are regularly bringing in higher sales numbers than their ballroom-style events. A recent press reported that for the first weekend in December, REDC's online sales were $37.8 million and their sales at their ballroom-style events were $31 million.

The Internet has made the auction process available to real estate agents and is changing the real estate auction industry. The success is still related to how well it is advertised and whether the pricing is right, but an online auction is an easier alternative than it use to be.

Another reason that online real estate auctions are becoming popular is because buyers are more comfortable bidding online. It's easier to bid online than to write up a sales contract, and negotiation between multiple buyers is all automated.

If you aren't familiar with online real estate auctions, it's a great time to do some research and find out more.

We'll also share what we've learned on on next webinar - Real Estate Online Auctions

Creating urgency & buyer demand

One of the things missing in today's market is a sense of urgency for buyers to act. Sure the government tax incentive is helping a little and I'm sure we'll see things pick up a little more before we reach that deadline, but then what?

Remember the days of multiple offers and offers that went above listing price? That sure was a lot more fun.

In talking with a RE/MAX broker this week, he shared with me an interesting observation... Whenever one of his short-sale listings goes under contract, or if he temporarily takes a listing off the market, then he gets several calls from other agents who want to know what happen or who have a buyer who wants to write a contract on a short-sale. These status changes are creating a sense of urgency for buyers.

So, is there a better way to create a sense of urgency and demand for a listing?

Yes, there definitely is and I've seen it work many times. It's online bidding and it involves taking a listing and marketing it in a non-traditional way. Marketing it in a way that sets scheduled open house previews with no other access (gets all the buyers in at the same time), setting a limited time for buyers to make an offer (usually 2 weeks or less), open competitive bidding so all buyers know the highest offer at all times and providing an interactive engaging online bidding experience.

If this concept is new to you, it's a lot easier than you would expect and think of the control it gives you and the seller. You now have a solution for someone who needs to sell quickly.

If you're interested in learning how you can use this strategy in your market, RSVP for our next webinar.

It will open your eyes to a whole new world of possibilities!

Another Online Real Estate Auction Myth

I want to clarify another common myth or misunderstanding about selling real estate through an online auction.

Myth: If I use an online auction, I MUST sell to the highest bidder.

Truth: Most online and even "live" auctions are done using a hidden reserve or “Subject To Confirmation”. In either case, the seller is protected and not forced to sell if the bidding doesn’t get high enough. An "absolute" auction is the only auction type that requires the seller to sell at the high bid.

When an auction is marketed correctly, the process brings true market value for a property. Even in the case where that price isn't as high as the seller had hoped, you can use the online bidding process to help bring the seller to reality on what the market will pay.

Right now, I'm seeing more and more online auctions used for short-sale situations because it's a quick way to get the highest and best offer to present to the lender. The competitive bidding also presents a good case that the highest bid is "true market value".

If you're interested in learning more about online real estate auctions - Join our next Webinar

A Common Real Estate Online Auction Myth

I want to clarify another common myth or misunderstanding about selling real estate through an online auction.

Myth: Buyers will place a bid at an online auction without ever visiting the property.

Truth: This is extremely unlikely. The success of an online auction depends on buyers having access to inspect the property before placing their bid online. Access is usually given through scheduled open house “previews”, but can also be done by appointment.

Although it does happen, it's unrealistic for you or your seller to expect that if you use an online auction, someone from another state or country is going to start bidding without ever visiting the property.

An online real estate auction will be successful, when you understand that the online bidding automates negotiation with the local buyers you've attracted through your marketing (MLS, open houses, yard signs, etc.).

And, yes, it does happen that non-local buyers sometimes get involved, but they either have someone locally they are working with or have another means to perform due diligence.

Multiple Offers: A good thing!

Getting multiple offers on a property is a good thing, right? 2 offers is usually not a problem, but what about 3, 4, 5, 6 or more?

On one level it's a good problem to have, but it sure can be a lot of work sorting out which one is best for your client. That's why I love the real estate online auction model for selling. You can get all interested buyers competing online in an open format and all the negotiation happens automatically.

It's much easier, exciting to watch and you end up with the highest price for your seller.

To me, it just makes sense. The process is a more proactive way to market and sell real estate. It attracts more buyers and accelerates the sale of a property.

It's fun to see real estate agents embrace and apply this new approach to selling. There are some very creative strategies being used which we will be sharing at our next webinar.

You're welcome to join us!

Why Real Estate Online Auctions?

Here are the reasons why online real estate auctions are going to be a major part of selling real estate in the coming years.

• The use of the Internet is only going to continue to grow. Most buyers already search for homes online, placing a bid is the next logical step.

• If you have kids, aren't they more technically savvy than you were at their age? The Internet is already a large part of their lives.
  
  
• Ebay has helped many Internet users become comfortable using online auctions to buy and sell items.
  
  
• The traditional "list & wait" option for selling real estate is outdated. A more proactive approach is needed.
  
  
• Some large auction companies are starting to see more sales from online events than from their live events. Why would they continue to bother with the cost and coordination of a live event?
  
  
• Too much inventory on the market. The online auction provides a more efficient way to accelerate the sale of real estate.
  
  
• An online auction is exciting for both buyers and sellers to be involved in. When done right, they are the best way to achieve "true market value" for a property.
  

2010: The Year of the Online Real Estate Auction

This is the year we will see exponential growth in the use of online auctions to sell real estate. The technology and user experience is getting better all the time and it's easier than ever for real estate agents to use them.

On Thanksgiving weekend, REDC (Real Estate Disposition Corporation) sold $33.6 million of real estate through online auctions on it's website (www.auction.com) and the following weekend sold $37.8 million. REDC is one of the largest companies using online auctions, but there are many others.

One misconception is that people will bid on real estate without seeing it in person. This is NOT how it usually works. Real Estate that is sold via online bidding usually has "Preview" times when the house it open for interested buyers. The Internet just provides the technology to automating the bidding process.

With the huge amount of real estate inventory, the continual growth of the Internet, and the need to accelerate the sale of real estate, it only makes sense that in 2010, we'll see an explosive growth of online real estate auctions.

Are you ready?