Online Real Estate Auctions - Advice and Information From RealtyBid.com
Quality news and information about national and local real estate auctions, sponsored and authored by RealtyBid.com and edited by RISMedia.Inman, RealtyBid.com Discuss Internet Home Auctions, Foreclosures
On Thursday, April 24, 2008, Inman News released an Industry Special Report titled “Auction market: Growing, growing strong.” Online home auctions and the growth of RealtyBid.com were part of the focus of the report. This is an excerpt from the report by Glenn Roberts:
…RealtyBid.com, an online real estate auction site launched in 2001, reported a record year last year, with the number of properties up for auction at the site rising 165 percent compared to 2006 and the total value of properties reaching $542 million.
The site had an inventory of 2,602 auction properties in November 2007, and the property inventory topped 1,000 during six other months last year.
Tony Isbell, RealtyBid.com president and CEO, said that Internet real estate auctions offer a less frenzied approach to the auction process than ballroom auctions.
Isbell, who has a background in the live auction industry, said the ballroom-style auctions with fast-talking auctioneers and big crowds can stir up excitement about properties, though Internet auctions “are a little less hype-oriented.”
“Ballroom auctions — I love them, they’re great, and I’ve done plenty of them for many years — are more of a circus-type event. You can get caught up in the emotion of the moment,” he said.
“Then once you purchase a property, you start wondering, ‘Was that really what I wanted to do?’ There is so much pressure in that environment. Our system … allows people to take a little more time. It’s a little more methodical.”
He added, “There is still competition, still excitement, but a little less pressure on the part of the buyer in making that decision.”
RealtyBid this week had about 894 residential properties at the site, as well as 38 condo properties and nine land parcels.
About 90 percent of the properties displayed at the site are bank-owned or foreclosure properties. Financial institutions and servicers for banks, real estate agents and builders supply properties for the site’s auctions, Isbell said.
“The foreclosure side has been our bread and butter for three years, and it will be for the next four or five years,” he said.
He said it’s short-sighted to think that the housing market will rebound in the next two years. “I think it’s going to be deeper and more painful than most people are predicting,” he said of the downturn, adding that it could last three to five years.
A more varied mix of properties are coming to auction these days, Isbell said, with builders seeking to auction off properties with values in excess of $500,000 and $600,000.
Even foreclosure properties are hitting the site with values above $400,000, he said, adding that it was more common to see foreclosure properties in the $100,000 range in the early stages of the real estate market’s downturn.
The auctions last for 14 days at RealtyBid, and in some cases the bidding period is extended if bidding does not reach an undisclosed minimum sale price, called a reserve price.
Isbell said he has seen more real estate agent involvement with the site’s auction properties. In 2007, real estate agents added about 150 properties for auction at the site, and already this year agents have posted more than 1,000 properties at the site.
Isbell said the auctions are designed to provide transparency in the bidding process, as bidders are identified and sellers can state whether or not they accept contingencies in the sale.
Sellers agree not to influence the bid in any way — eBay also has policies to discourage sellers from influencing the bid process. Some live auction companies do allow properties to be automatically bid up by the auction company to a specified amount on behalf of the sellers — a practice some refer to as “phantom” bidding.
“We don’t allow shills or phantom bids in any form or fashion on our Web site. It’s not something we believe in,” Isbell said.
RealtyBid had about 150,000 unique visitors per month last year, and that number is now closer to 600,000.
“There is a lot of interest in foreclosures right now. Everybody’s looking for a deal and obviously a lot of them are out there right now,” he said.
RealtyBid is working to sell some properties for builder Lennar Corp., and is currently selling Lennar properties in the Phoenix area.
Isbell said he expects to see a surge in condo units at the site, as developers in some major condo markets are still completing projects that were approved during the real estate boom.
“In the Miami area there are going to be more condos that get certificates of occupancy this year than in the past 10 years,” he said. “I think you’re going to see a massive amount of foreclosures in those particular types of units. By the end of this year we’ll be selling a lot of these kinds of units…”
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About Local Author
Tony Isbell is the president and CEO of online real estate auctions company RealtyBid.com. He has been involved with the real estate auction business on a national basis for more than 16 years. He has worked in various capacities in the auction business throughout his career, including in national positions such as managing director of government operations and national sales director for one of the country's largest national auction firms.
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