Real Estate Online Auctions - Puts YOU in control

Technology has provided the tool and real estate agents are taking advantage of it.

The "tool" is an online auction and it has given real estate agents the ability to market and sell their listings quickly through an auction process without involving an auctioneer.

The process puts the agent in control of when the marketing begins, when the open houses will be and when the bidding will end. Some do it in 2-3 weeks while others have taken the process down to 1 week.

Regardless of the methods, the process works and it works well. It's a nice option for your clients when the average days on market is at least 6 months.

If you'd like to learn more about the process and how it works, please join us Thursday at 1 pm CST for a FREE webinar.

Click Here to Register

Hope you can join us!

SOLD in 6 hours - using an online auction

One of the benefits of being a provider of a real estate online auction system is that I get to see different strategies that are used by our customers.

Before last week, the shortest successful online auction was 2 weeks. Not bad when you consider there are properties sitting on the market for months.

However, last week a new standard was set. One of our customers put a property up for auction for only 6 hours. During that time, it received 52 bids and the bidding climbed to $520,000 before it ended.

On Thursday at 1 pm CST, we'll share what they did to make this happen.

Hope you can join us - Click Here to Register

Do online real estate auctions work?

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

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. That's why REDC (auction.com & $5+ billion in sales last year) now has "online only" auctions in addition to their ballroom-style auctions.

Prior to the popularity of the Internet, only live auctions were available. A live auction is successful in drawing attention, but there is substantial marketing cost and coordination 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 can cost much less. 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 successes continue, more sellers will move to online auctions, changing the way real estate is bought and sold for everyone.

Multiple Offers: A good thing?

Getting multiple offers on a property is a good thing, right? 2 offers is usually not a problem, but what about 3, 4, 5, 6 or more?

On one level it's a good problem to have, but it sure can be a lot of work. That's why I love the online auction model for real estate. You can get all interested buyers competing online in an open format and all the negotiation happens automatically.

It's much easier, exciting to watch and you end up with the highest price for your seller.

To me, it just makes sense. The process is more effective than the "list & wait" model and our market needs something that will attract more buyers and accelerating the sale of properties.

What I don't understand is why I'm finding only few real estate agents open to the concept of using online auctions?

Is it too new? Does an "auction" have a bad connotation? Do agents not understand the process? Maybe all of the above?

Why the resistance and hesitation?

I'd love your feedback.

Real Estate Online Auctions: 101

It's no surprise that online auctions are quickly becoming the most powerful way to sell real estate in any market. The problem is that most people don't understand the process and the strategies to make them successful.

Hopefully, I can help clarify the use of online auctions and share some basic strategies.

The general philosophy of an auction is that the terms are the same for all buyers and the competition between buyers determines the price. This is different than the traditional MLS listing where terms are usually negotiated with price.

One big misconception about auctions is that the seller has to sell his property at the highest bid regardless of what that is. The fact is, that most online auctions are done "subject to seller confirmation". In other words, the seller has the right to accept, reject or further negotiate the highest bid. The online auction is a process to get the highest offer possible to present to the seller.

Here are some basic online auction strategies...

Opening Bid - This amount is usually around 50-60% of the target price. However, when the marketing is done well, you can be just as successful starting the bid at $1. The strategy can be different based on the property.

Access to property - If you expect to get top dollar for a property, people have to be able to get in and see it. Have at least 3 well planned and marketed open house previews. The smaller the window (2 hours is good), the better chance of having multiple buyers in at the same time stimulating competition. Bonus: List in the MLS 5 days prior to first showing and don't let anyone in before the first scheduled preview.

Pictures & Video Tours - A huge difference on getting people interested in visiting the property and placing a bid.

Marketing - Makes all the difference. The benefit to an online auction is you are doing heavy marketing for a limited pre-defined time. This helps manage the costs. Bonus: Get a mortgage broker to pay you a fee to be at your open house previews. They get leads and you can help cover marketing costs.

These are just some of the many strategies that come into play while using online auctions. I'm sure as you start using this process and start thinking "outside" the traditional sale process, you'll come up with even more.

Creating an "auction" environment

The ideal selling situation is whenever you can have multiple buyers competing for your listing all at the same time.

Here are some ideas that will help you create this "auction" environment.

1. Price - The price has to be as good as or better than anything comparable in the area.
2. Condition - The house should show very well, even be professionally staged if possible
3. Quality Listing - Put quality photos, a video tour (if possible), and a well written property description in the MLS listing.
4. Limit Access - Ideally you put the quality listing in the MLS on a Sunday night with no showings until the following Friday. In addition, the first showings on Friday are limited to a 2 hour window. This gets all interested buyers and agents in the property at the same time creating competition.
5. Require 48 hour offer response time - Let all agents submitting offers know you will need 48 hours to respond.

This process can work well in the right markets with the right homes. I realize it's not always successful, but it's easy to try.

The one drawback is that in the multiple offer situation, buyers don't typically know where they stand. They are often told to submit their "highest & best".

This is where technology can help. With a couple more steps you can do the same thing but accept all bid/offers online in an open format with a defined deadline. This systematically allows buyers to compete with others and gets you and your seller the best price without all the added paperwork (i.e. offer/counter-offer/counter-counter, etc)

To see how this process is being successfully used today, join us Thursday at 1 pm CST

Click Here to Register

Are you ready for the bidding wars?

The market is starting to turn, there’s talk of the “bottom” being reached and buyers are not such a rare commodity anymore. Now we are hearing about multiple offers and the start of bidding wars.

It’s all great news, but there’s still a lot of inventory out there. How can you get your listings noticed? How can you negotiate with multiple buyers to achieve the highest offer for your sellers?

One growing strategy is to create urgency and stimulate demand by using an online auction. An online auction provides open competitive bidding to achieve the highest possible offer for your listing.

There are still a lot of misconceptions about online auctions, so here are a few things you should know.

1. Auctions are NOT only for distressed properties - While distressed properties are sold by auction, they are not the majority of auction sales today. More luxury and brand new homes are being sold by auction than ever before.
   
   
2. Auctions don't force the seller to take the high bid - Auctions advertised as "absolute" force a seller to take the high bid. However, the majority of real estate auctions are done "subject to" seller confirmation.
   
   
3. An auction does help capture the best sales price – Just like multiple offers on a typical MLS listing, an auction can yield the best price by creating competition.
   
   
4. An auction does give you 3 chances to sell - Auctions create urgency and get buyers to act either before bidding opens, during the open bidding period or after bidding ends (if the high bid isn’t accepted by the seller).

If you’re interested in seeing how Realtors are using online auctions to get buyers competing for their listings, click here to register for our FREE webinar on Thursday August 13h at 1pm CST.