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