Use Real Estate Auctions to Create Urgency with Buyers
We are in the midst of a buyers market … that is what they say, anyway. Then there is hope …there are buyers out there! One may ask, “Well, where are these so-called buyers, and how do I get them to buy my property?” There is the usual way about it - plop a sign on the lawn, list the property in the Multiple Listing Service (MLS), run some ads in the newspaper, hold open houses, etc. That seems to be working really well these days … (please note the sarcastic tone). Or, why not join in the growing trend of online real estate auctions.
What? Thinking that online auctions are only used for purchasing celebrities’ used chewing gum or rare trading cards? Absolutely not. While there are auction sites dedicated to the buying/selling of these random items, there are actual sites that cater specifically to buyers and sellers of all sorts or real estate! And, perhaps the greatest feature of an online auction is that you don’t have to sit on metal folding chairs listening to some surly gentleman shouting, “heya, fitty, nowdoIhearfitty-fi, heya, fity goin’once …” well, you get the picture.
The best way to describe an online real estate auction is that it is an interactive marketing tool. Listing agents are able to advertise their property, on websites designed specifically for these types of auctions, and get offers from local and out-of-town buyers through the online bidding process.
Online real estate auction sites are designed to maximize a property’s exposure by targeting buyers interested in that property’s location/price/features, etc. Sellers are then able to capitalize on an audience that is much larger than a local MLS. This is done through the online auction process.
With the advances of Internet technology, online real estate auctions become easier and more effective each day. Sellers are able to reach captive buyers by following a few easy steps.
Step 1: The listing agent gathers all the property details, just as would be done for any other type of listing. The more information and pictures available for potential buyers to view, the better.
Step 2: Decide how long the auction will run, (a typical auction runs for 2-3 weeks,) and also the terms of the auction. Some things for the seller and agent to consider in their terms are: earnest money requirement, closing date, inspection and finance contingencies, etc.
Step 3: The listing agent will then coordinate the marketing plan, decide on the hidden reserve (minimum price) and suggest a starting bid.
When everything is in place and the marketing plan is coordinated, the auction is activated online. Buyers can view the information the sellers have provided, and, if applicable, set up appointments to view the property or attend an open house. If the buyer becomes interested in the property, they are able to submit an offer online. Other interested buyers will be able to see the current high bid, and bid against it if they choose. When the auction expires, the highest bidder who has met or exceeded the reserve is the winner. Online auctions are binding, but it’s still important that the seller, buyer, and agents come together shortly after the auction ends to sign contracts and exchange escrow monies.
Online real estate auctions are becoming a more common way to advertise and sell properties to buyers all over the country and world. They are an opportunity to reach a captive audience of capable and, more importantly, willing purchasers. Combine that with the power and excitement that the bidding process brings, and online auctions become a valuable option for agents to offer to their clients.
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