Online Real Estate Auctions In Austraila?

You may or may not be aware that in Australia the majority of real estate is sold via the auction method.

When I first found that out about 7 years ago, I figured they would soon embrace doing them online.  Well, that hasn't really happened yet, but that could be changing soon.

I just came across this article about a house that recently sold Lilyfield Australia for $1.6 million all online.  It ran for 3 days and attracted 22 bids.

It is certainly requires less to coordinate and extends the reach of your buyer audience.  It only makes sense to take them online and will be fun to see that trend continue.

Here is a link to the full article in case you are interested.

An Online Auction Creates 3 Opporunities to Sell

Today I wanted to share a strategy I use that creates 3 opportunities to get a property under contract during an online auction process.

Here they are...

1st opportunity (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 even opens.

This actually happens about 20% of the time. I had an auction once where we got a written offer the first day I put the auction sign out. It turned out the buyer had seen the home when it was previously listed and finally got motivated to do something when he saw it go to auction. In this example, the seller agreed upon a price and we canceled the auction. By far, this was the easiest sale I've ever had.

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

3rd opportunity (Post auction): If for some reason, the bidding doesn't meet the seller's 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 situation and give them the chance to submit their highest and best offer.

From my experience, using these 3 opportunities as part of your online auction strategy will help increase your success rate.

If you'd like to learn more about using online real estate auctions join us September 8th at 2 pm EST

Still using slow dutch auctions to sell your listings?

Currently, the most common way to sell real estate in the U.S. is by listing it in MLS and then continuing to drop the price until a buyer makes an acceptable offer (see above).

Most real estate agents don't realize this is an auction, a dutch auction - just done very slowly.

By definition in Wikipedia, a Dutch auction is a type of auction where the auctioneer begins with a high asking price which is lowered until some participant is willing to accept the auctioneer's price.

Since you're already doing a type of auction, why not try a traditional auction where you open bidding to a group of interested buyers and let them determine the market value. It can be done much faster and is a much more exciting way to sell real estate.

The traditional auction puts you in control. You determine when the property is open for viewing, you control when the bidding will end and the seller decides whether they will accept the highest bid.

With the glut of inventory available in many markets, auctions are gaining momentum and by using the internet, you don't need to coordinate a "live" event, all bidding is done online.

Not sure how? Join us on our next upcoming online auction training session.

What are the banks thinking?

Last week, I took a buyer into a bank owned "REO" property where the bank decided to have a company come in and rehab the inside (paint, carpet, new appliances and flooring bathrooms and kitchen). You can tell they took the lowest bid for the work because the work is okay but very little attention to detail.

The property was priced right and I was sure it would go fast. My buyer is an investor so he was only interested at a price where he could "finish" the details and really make it shine (about 30% off their list price).

So, we submitted an offer at his price and they countered only $900 off their listing price. Neither of us was surprised so we didn't think much of it.

However a couple of days later, I get a call from the listing agent wanting to know if we wanted to counter again. I told her we were so far away we didn't want to waste their time. She convinced us to counter so he did only a couple thousand higher.

To our shock an amazement the bank re-countered dropping their price drastically very close to my buyers counter and he agreed to come up another thousand and now it's under contract.

I don't know the reasoning behind the banks decision, but I do know, in this case, the listing agent didn't help the bank get the most they could.

This listing agent usually has around 200 REO listings at anytime. She has a large staff, but the attention to detail gets lost in the shuffle.

For this particular listing, I mentioned the bank hired someone to update the property. After these updates were made and it was put back on the market, there were no new pictures. The listing still had the old ones that showed the distress. There was NO information in the remarks section about the updates, just the standard REO listing stuff.

Here's my point.

#1 - Why are the banks not spreading their listings over more agents that can provide better attention to detail and get them higher prices?

#2 - Why are the banks not turning their listings over to real estate agents capable of doing the best marketing available today ... online auctions? For some reason, they wait until a property has been sitting for a few months and then turn it over to large nationwide auction "clearing house" which can't pay attention to detail either (I've shared the lack of marketing and coordination from those companies in past emails).

Solution: - The banks need to get on board with the use of the best technology and marketing available today. They need to require their listing agents to use an online auction process from day 1 and sell these listings to the highest and best offer within 2 weeks or less. This would have a drastic effect on the bank inventory nationwide. It makes sense and it's simple and I'm sure it will happen at some point. Hopefully sooner than later.

It's mostly about the marketing

Last month, I shared some ideas on helping buyers be more comfortable bidding online.

Since then, I held a 7-day online auction for a property in St. Louis and thought you might be interested in the results.

First, despite the winter weather conditions, it was very successful getting buyers into the house. The house was a bank foreclosure so it had no heat and with temperatures in the 20's and 4 inches of snow, the house felt colder inside than it was out.

I held 3 open house previews Friday, Saturday & Sunday but only for 1 hour each (I didn't want to sit in a cold house longer than I had to). During those 3 days I had 65 people come through, which I felt was an amazing turnout considering the conditions. I used Craigslist and yard signs for most of my marketing.

Unfortunately the bidding didn't meet the sellers reserve, but we are still negotiating with the winning bidder and I'm hopeful it will go under contract soon.

Once again, I found that marketing a property using an auction gets people to notice and into the house (even in less than ideal conditions).

Regardless of the final results, I always learn something. Here are my takeaways...

1. Friday open houses aren't very popular in St. Louis, I only had 4 people come that day.
2. Saturday & Sunday open houses are well attended.
3. Seller needs to be more motivated (He is now and has come down on his "reserve")
4. Put it in the MLS sooner - I didn't put it in the MLS until Saturday, thinking I could find a "pre-auction" buyer looking for a non-MLS "deal" and not pay an agent co-op. By the time most agents saw it in the MLS, the bidding had ended. (Won't do that again!)
5. With NO heat, warm boots and two pairs of socks are a MUST.

If you're interested in learning more about using online auctions to sell your listings, join us on our next webinar - Real Estate Online Auction Webinar

Last month, I shared how I've found some "hidden" deals for buyers in my St. Louis market on Auction.com (REDC auction company)

I'm still finding them, and the reason they are "hidden" is because of the lack of coordination and communication between the local listing agent and REDC. A big opportunity for the local listing agent who takes ownership of the process and does the online auction themselves.

In addition, I've been contacted by at least 2 buyers a week wanting to know where to find the "deals". I think it's because the word is starting to get out in the media that the real estate market has hit the bottom and on it's way back up.

Many of these buyers are intimidated by online auctions because they are still "new", so I started to give some thought to what can be done to help buyers be more comfortable with the process.

Here are some initial ideas (some obvious, but surprisingly often not done)...

1. Clearly communicate the dates and times of the open house previews
2. Create short video that answers FAQ's and invites them to contact you with additional questions
3. Make it easy for buyers to ask questions (email, phone, online chat, text, etc.)
4. Give the winning bidder 5 days to do inspections after the auction (not done with traditional auctions)
5. Don't use a buyer premium, collect your commission from the seller

Do you have any additional ideas? I'd love to hear them.

Interested in our next online real estate auction training session? Register Here

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.

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

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.

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.

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.

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

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 - 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.

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