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.