Online real estate auctions ... do they work?

“Do online real estate auctions really work?” is a common question from anyone new to using online auctions to sell a property.

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.

Prior to the popularity of the Internet, only live auctions were available. A live auction is successful in drawing attention, but they require coordination and there's a substantial marketing cost involved.

Today, however, the Internet has made the auction process available to more people and is changing the real estate auction industry. An online auction can be just as successful in drawing attention and be done for much less cost. The success will still be related to how well it is advertised and whether it’s a good deal, but an online auction is an easier alternative than it use to be. Sellers are looking for more options, an online auction provides one.

Another reason that online real estate auctions are becoming popular is because buyers are more comfortable bidding online. No longer are online auctions just for “as-is”, sight unseen properties. The best success comes by opening the property for previews and allowing inspection periods and/or providing inspection reports. Another reason for their popularity is that it’s easier to bid than to write up a sales contract. All negotiation is automated and done on line.

An auction is one of the best ways to market or find a deal on a property. As buyer confidence grows and the online Real Estate auction success continues, more sellers will move to online auctions, changing the way real estate is bought and sold for everyone.

Will an online auction work in my area?

One common question from real estate agents who are new to online auctions: "Will it work in my area?"

The answer is that as long as people in your area have access to the Internet, than yes it will work. If people have no access or only slow dial-up than it will still work, just probably not as well.

Even if no one locally has Internet access, which is rare, you can still reach a world-wide audience of buyers and you just never know who may be interested.

The Internet is a powerful medium, and an online real estate auction will help you reach the most buyers possible in the shortest amount of time.

So, yes an online real estate auction will most likely work in your area! The real question is, will you be the leader or follower?

Online real estate auctions, what are the advantages?

The traditional way of selling properties involves listing in an MLS, doing some advertising and maybe holding some open houses. It works okay if you have lots of patience, but how do you stand out from every agent with every property doing the same thing? How do you create a sense of urgency for your buyers?

This is where online real estate auctions come in. They provide a great option for you to sell your listings. It minimizes the hassles of prospects visiting the house frequently at untimely hours as well as attracts more buyers than any other method of selling.

Here is a list of some of the advantages of holding an Online real estate auction.

1. Reach: A huge advantage of an online auction is that you can attract buyers from anywhere in the world. The more buyers you attract, the greater the competition and higher the bids that come in.

2. Control: You decide the date and time the auction will end. You decide when to hold the house open for previewing. The time you spend marketing it is limited to 30 days or less.

3. Competition. It is a known fact that when buyers compete at an auction it drives up the price. Online real estate auctions are no different. The more buyers you attract the greater the excitement and higher the competition.

4. Automation. An online real estate auction lets you negotiate with multiple buyers at the same time in real-time. No paperwork, just let technology take over.

5. Buyer leads. An online real estate auction only produces 1 winning bidder, but it also produces a list of interested buyers (non-winners) that you can turn into bidders or buyers on your other listings.

Regardless of what type of real estate market we are in, an online real estate auction provides a great way to attract more buyers, create competition and urgency and ultimately sell your properties for a better price.

Are you getting the most out of the Internet?

There's no question the Internet is an important part of any real estate business. I can't imagine there's any active real estate agent who doesn't have a website or a least a web page on their company's site.

After all, with over 84% of buyers searching for homes online, you'll struggle to compete without one.

However, it's not just having a website, it's what you do with your website to provide value. Some real estate agents are reaching out by using social media, virtual tours, SEO strategies and blogging which are all great strategies, but there's still something missing.

I believe the real opportunity is being able to engage and negotiate with buyers in real-time. One way to do this is by accepting offers/bids online for your listings. When you allow buyers to bid online, you leverage technology to create urgency, negotiate with multiple buyers at once and get your client the highest and best offer.

Using online bidding (a.k.a. an online auction) takes your listing to the next level. Now, not only can buyers see pictures and videos and all the details about a property, they can submit an offer (bid) from anywhere with an Internet connection.

The Internet is truly a powerful medium, make sure you are leveraging it, the best you can!

Online real estate auctions ... exciting to watch!

Last Friday we captured the end of one our customers listings on video. This 2 minute video is a great example of the bidding frenzy that can occur as an auction winds down.

What's especially interesting in this example is that the listing agent didn't do any of the things we teach to market it. There were no auction signs in the yard, there were no open house previews and there was no effort in marketing it. This was a sort of "test" for them.

I strongly believe that any listing agent who embraces this strategy and works the "whole" process will dominate in their market.

Click here to watch the video

Enjoy!

What can you learn from "live" auctions?

I've attended several "live" real estate auctions in the past to observe and learn. Most of them I've attended were successful, but I've also attended a few that haven't been.

There was even one I attended that didn't receive a bid. I really felt bad for the auctioneer and the seller. All the time and money they spent and only about 20 people showed up. Unfortunately, that's just part of the business.

There is a lot to learn by observing a live auction and the most important thing I've learned is marketing. If the auctioneer can't get people to show up, it doesn't matter how well he can work the crowd, the chance for success is minimal. For each "live" auction, thousands of dollars are usually spent on direct mail, newspaper ads, etc with no guaranteed results.

That's why I've been so drawn to using online auctions. The success is still greatly effected by the marketing, but it is much easier to get people to show up online than on site. I've seen it over and over again. If you do a good job marketing your online auction by using signs, holding open house previews, using craigslist and other Internet marketing, you will attract attention and you will receive bids.

Unfortunately, most people I see using online auctions aren't doing the marketing. Instead they throw it up on a site like Ebay, RealtyBid, or our site REIAuctions and expect it to sell. They are depending on the traffic to the site alone and that usually isn't enough.

The real key to successful online auctions is a strong marketing effort combined with the existing traffic on the auction site you are using.

It really isn't that hard, the cost of time and money is minimal, and the results are usually impressive.

Online real estate auctions take effort!

Putting a property up for auction online is only half the job. Yes, it's possible buyers may stumble across it and place bids, but the chances for success are greatly reduced if that is all you do.

There is an opportunity to stand out from the crowd, be different and be responsible for the success. If you list a property for auction and then use open house previews, yard and neighborhood signs, internet marketing and local marketing, your chance for success greatly increases.

An auction naturally draws interest, whatever you can do to let people know about it increases your chance for success. Don't sit back and wait, be a maverick marketer and see your success soar.