Wednesday, June 23, 2010

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.

Wednesday, June 16, 2010

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

Thursday, June 10, 2010

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!

Friday, June 4, 2010

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.