Real Estate Online Auctions - Part 2 of 3

This is part 2 of 3, but just in case you missed part 1 here is a little background ... After 14 years of working in the computer industry, I was naturally drawn to the concept of online auctions when I got involved in real estate. I've spent the last 3 years using online real estate auctions and here are some more answers to common questions about them.

Q) Aren't auctions just for properties that need a lot of work?

A) No, not anymore. I'm starting to see auctions for brand new properties from builders and banks who just need to get rid of them. Owners of any type of property, who are motivated, are turning to auctions for a solution.

Q) How long does an online real estate auction last?

A) Typically about 3 weeks. It depends on your marketing campaign and how many open houses 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. However, there is no requirement that I've come across that requires a special license.

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 watch hungry buyers fight it out online?

Thanks for Reading! In the next few days, I'll share part 3

Real Estate Online Auctions - Part 1 of 3

After 14 years of working in the computer industry, I was naturally drawn to the concept of online auctions when I got involved in real estate. I've spent the last 3 years using online real estate auctions and have learned a lot.

I've found there is a lot of confusion on how they work or how to make them work. I will share answers to the most common questions in this 3 part blog.

Q) Will an auction force me to sell too low?

A) No, not if you structure it correctly. There are 3 main types of online auctions. If you use a Reserve Auction, you can set a hidden reserve price on the system and the auction will not be considered successful unless the reserve is met. If you use a Minimum Bid Auction, you don't set a system reserve but you can state in your terms that the winning bid is subject to seller approval. The third type is an Absolute Auction, and this is the only type that could force you to sell it too low. Using this type of auction is not suggested, unless you are prepared to sell at a loss.

Q) Are online bids legally binding?

A) Yes, if the terms indicate they are and the online auction system has a trail to show the bid was made by the person. There are pages of legal information I can point you to on this, but I want to keep it short.

Q) What if the high bidder backs out?

A) There is no difference than having a signed sales contract on a property. You decide how much of an effort you want to take to pursue the person legally.

Q) How many properties have been sold through online auctions?

A) No one really knows. I know of many that I've sold personally, I've also know of many others that have been successful as well. The main thing to realize is the auction method of selling works well. The success, whether live or online all depends on how well the method is executed.

Q) What's the secret to being successful with an online auction?

A) Good information and Advertising. The online listing needs to contain thorough information about the property, terms that are easy to understand, pictures and a virtual tour, if possible. If the listing is put together well, the other key is to get the word out so people know about it. There are several good Internet advertising sites Free and paid that help along with yard signs, fliers, ads in local publications, etc.

In the next few days, I share part 2. Thanks for reading!

Auctions, by any other name

In general, it seems real estate auctions are viewed as "fire sales" on foreclosed bank owned properties that need a lot of work. While auctions are definitely used for those type of properties, that is not always the case.

If fact, auctions are now becoming common for builders with brand new properties as well as home owners with high end properties. An online auction is a valuable strategy, useful in selling any type of property.

However, in order to get away from the negative connotation of the word auction, the term "online bidding" is becoming more common. If a seller is not sure about doing an "auction", it can be helpful to talk to them in the terms of "online bidding" instead.

Real Estate Internet Auctions - Take hold

As technology gets better and better, the excitment of buying at auction is moving online.

Countdown timers, screen updates with new bids, help keep buyers excited and involved in the bidding process.

Not to take away from the skill involved in holding a "live" auction, an Internet auction is sure easier and less expensive to coordinate.

The opportunity is now, the tools are available now. It's time to make online bidding a part of your marketing and sales strategies.

Real Estate Auctions - Is there a better way!

No, there is not a better way to sell than by using an auction.

It's interesting that there are still a lot of sellers who are not sure an auction is the best way to sell.

What could be better? You are marketing for a short period time using a proven method to get buyers interested and inside to view a property. An auctions creates competition by letting buyers bid against each other in an open format. This strategy is simply the best way to determine the value of something.

In fact, do you realize that our entire stock market is an auction? An auction isn't something new. It's been tested and proven for centuries.

One common concern of sellers is that they will be forced to sell their property at a price that's too low. If handled correctly, that is not the case. The seller is always able to stay in control.

Another concern is that an auction may not receive a winning bid and that could hurt the chance for selling. That is simply not true. An auction is not always successful, but they always create interest and lots of leads of interested buyers. More times than not, a deal can be worked after the auction ends.

If you have property to sell and aren't using auctions, it's time to get involved and find out for yourself why they are simply the best method to sell a property.

The Internet - moving us forward

Not long ago, most real estate agents didn't use the Internet or e-mail. I can't imagine there are any active real estate agents who don't use it today.

We keep hearing that about 90% of all buyers looking for homes start their search online, so if you're not there, you probably won't be in business long.

But what's next? Where will technology take us now?

It's not hard to see that online bidding and online real estate auctions are the next big change in real estate. Why? It only makes sense.

Our society is constantly changing, looking for faster and more efficient ways to do things. Being able to post a property online and take offers 24x7 is the easiest and most efficient way to sell real estate. It's great for the seller who can set a date to sell and the buyer who can compete equally with other buyers. There also isn't a better way to determine the market value.

It will be fun in the next few years to see the online auction become the preferred way of selling real estate because everyone benefits.

On the auction block

Today's real estate market is filled with uncertainty and that's why so many motivated sellers are gravitating toward auction sales.

Auctions have gained huge popularity because sellers want a definitive sale date and time. Depending on the area, the typical time on the market is about six months and with an auction you can speed it up to a four to six week period.

There are still many buyers who are unfamiliar with how an auction works, and that's where educated agents can make a big impact. Real estate agents who make the effort to understand an auction and the tools available to them which allow them to offer an auction to their clients will become extremely busy over the next few years.

Unlike traditional real estate where you wait for the market to come to you, in an auction you're going after the market and inviting it to the property. And, with the introduction of Internet bidding, more buyers can participate resulting in a higher selling price.

Experts in the field predict one in every three homes will be sold by an auction by 2010, is there any reason not to get started today?