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?