Luxury Rhode Island Home - Online Auction

As the number of real estate auctions continue to grow, it's clear that they are no longer just for distressed and run down homes. Auctions for luxury homes are becoming more common and I'm seeing even more done with online bidding.

The Internet is a priceless tool for getting attention and activity on any property and using an online auction helps focus the activity. In addition, buyers love the convenience of being able to place a bid anywhere they have an Internet connection.

Check out the current auction ending July 7th for a beautiful home in Newport, Rhode Island. Originally listed for $14,000,000 the opening bid is only $6,500,000.

325 Ocean Avenue - Newport, Rhode Island - Click Here

Real Estate Auctions - What agents need to know!

Real estate auctions are becoming mainstream in many parts of the country because many sellers can't afford to wait for an offer and need a more proactive approach.

In addition, many banks are taking their listings that have been sitting with an agent for over 100 days and giving them to large auction houses such as REDC, Hudson & Marshall, and Williams & Williams to liquidate.

Regardless of the reasons, auctions attract buyers and accelerate the sale of a property. It's important, as a real estate agent, you understand them. Here's what you should know.

1. Auctions are not magic - When done right, auctions attract lots of attention and get buyers into a property, but they bring fair market value. If a seller is upside down with their mortgage, haven't had any interest after sitting 6 months in the MLS, don't expect an auction to "magically" find a buyer willing to pay close to the MLS price.
   
   
2. Marketing is key - Auctions attract attention, but people still need to know about them.
   
   
3. 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.
   
   
4. Auctions don't force the seller to take the high bid - Only auctions advertised as "absolute" force a seller to take the high bid. The majority of real estate auctions are done "subject to" seller confirmation.
   
   
5. Technology gives you access - Before the Internet, the only option for using the auction method to sell real estate was by working with an auctioneer. Now, the technology is so good you can use the auction method aka "online bidding" to market and sell your listings yourself.

Real estate auctions are here to stay, regardless if we're in a buyer's or seller's market and Internet technology gives you the ability to get involved.

Pick up a FREE copy of my 7 steps to online auction success to help you better understand the process and strategies.

Creating Urgency and Competition for Buyers - Priceless!

Recently, one of our new customers ran her first online auction to sell one of her properties. It was another good example of how creating urgency and competition, gets buyers to take action.

Being new to the process, she was very diligent in reading all of our training materials and strategies, watching the how-to videos, etc. She also called and e-mailed me several times through the process with other questions and to get my opinion.

Now the property she was selling was minimal at best, it was a 2 bed, 1 bath 860 sq. ft. home with no basement, but it was nicely rehabbed and ready to move in. It was a good property for a landlord because it could be rented and would cash-flow.

The auction was open for online bidding for 20 days. It was listed in the MLS with bidding information, signs in the yard and 2 open house previews. She followed the process as suggested.

With 4 days left she had two interested buyers and they were taking turns being the high bidder. On the last day a 3rd buyer jumped in and got involved in the bidding.

Due to all the competition, one of the 3 buyers told her they were placing a bid for full price as listed in the MLS and sending a contract.

Rather than end the auction early and accept the full price offer, she decided to let it run it's course. The auction never did reach the full MLS listing price (close - a few thousand less), but that buyer who really wanted it still wrote their offer at full price. She was thrilled and surprised because she wasn't expecting to get her MLS listing price.

To me, it's just another example of how the online auction process can create competition and urgency for buyers. This results in "demand" which is always a good thing for a seller.

Real Estate Online Auctions - Strategies for Success

Over the past 4 years, I've been focused on using Online Auctions to market and sell real estate.

There is a huge opportunity right now to take advantage of all the buyers looking for deals in today's market. When you sell using an online auction you draw more buyers than any other method. Buyers today know (thanks to the media) that there are great deals to be had, they just don't know where to look. When you sell using an auction, you are telling them LOOK HERE.

However, even with this great opportunity, there is still a lot of confusion on what is needed to make an online auction successful. Here are a few strategies that will help you succeed with this powerful method.

1) The property being sold MUST be a good value. If a property is listed in the MLS and isn't getting offers, don't expect the online auction process to yield anything different unless the owner is willing to take at least a 10% discount.

2) Take at least 10 pictures of the property, 20 is better and pictures plus a video tour is best.

3) Schedule and hold at least 2 open house previews, 3 is best.

4) Place signs in yard and directional signs on nearby street corners. During open house previews make sure your open house signs get attention (i.e. balloons or ideally hire a person to stand and hold it).

5) MLS - Put the listing in the MLS with information about the online auction, open house preview times and a link to the listing where bids can be placed.

6) Marketing - Craigslist every 2 days (per their terms of use), flyers in the front yard, e-flyers, postcards to neighbors, newspaper, etc. Marketing is key. An auction naturally will get buyers to take notice and react, but they still need to know about it.

These are just some of the main strategies that will help an online auction be successful, hope you can use them in your next or first online auction.

The unrealized benefits of using online auctions

Technology continues to provide better tools and strategies for selling real estate. It only makes sense that real estate agents who stay on the "leading edge" will have an advantage over those who don't.

Using online real estate auctions is one strategy that can give an agent the "edge" and we're still in the initial stages of them taking hold in the market place.

Many real estate agents don't realize, that besides selling the property being auctioned, there are several "side" benefits of using an online auction. Here are some of them...

1) Since all the bidding is online, you get a record of everyone that placed a bid. At the end of the auction you will have a high bidder but you will also have a list of the other bidders contact information that you can invite to your next auction or help them buy another property.

2) Marketing a property through the auction process attracts many more buyers to your open house "events". You can collect information on these buyers so you can follow-up if they aren't the winning bidder and help them buy another property.

3) Since you attract more buyers to your open house "events", you can approach a mortgage broker or lender to pay to be on site at your open house. If done right, you can collect enough to cover all the costs of advertising, catering, etc.

4) Your auction marketing will attract other homeowners who are tired of waiting for their property to sell. Those who are motivated will be very interested in having you do an online auction for their property. One online auction almost always leads to another one and many times several more.

5) The majority of winning bidders at an online auction are not represented by a buyer's agent. That means there is a good chance you won't have to split your selling commission.

These are some of the many added benefits of using online auctions to market and sell a property that most agents don't realize or capitalize on.

Hope you found it helpful!

Real Estate Online Auctions - more FAQ's

After 14 years of working in the computer industry, I got involved in real estate. I was drawn to the concept of online real estate auctions and I've spent the last 4 years using them. Here are some more answers to common questions about them.

Q) How do auctions give you 3 opportunites to sell?

A) By holding an auction it's not uncommon for someone to bring a written offer when the auction is announced to try and get it without competing with others. The second opportunity is when the auction ends with a winning bidder. The third opportunity is from follow-up with all interested buyers if it doesn't bring a winning bid.

Q) What about non-U.S. buyers?

A) An online auction makes a property open to a worldwide audience. I was surprised the first time I saw a buyer from France win an auction. It demonstrated to me that online bidding is an effective way to get a property in front of a worldwide audience.

Q) Will an online auction work in my market?

A) It depends. If you are in an area where most people have high speed Internet access, than it will work. If you're in an rural area where most people use dial-up and therefore aren't on the Internet much, it will be much harder.

Q) Do I need a special contract or process to sell through an online auction?

A) No. An auction is simply getting you to agreement on price and terms with a buyer. The standard contract takes over from there, just like any other purchase agreement.

Thanks for Reading! I hope you learned something.

Online Real Estate Auctions - More FAQ's

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 4 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 and must sell quickly, are turning to auctions for a solution.

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

A) Typically about 3-4 weeks. It depends on how well you plan 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 is the only state that I've heard that requires 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 watch hungry buyers fight it out online?

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 will be a big part of that.

Thanks for Reading! In the next few days, I'll share some more FAQ's