All Posts Tagged With: "st. louis auctions online"

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 I’ve been asked during the past 3 years.

Q) Will an Online Real Estate 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 real estate 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.

Q) Aren’t auctions just for distressed 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 that 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?

Q) How do auctions give you 3 opportunities 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.

Tom Wood
Real Estate Auction Systems