Traditional real estate auctions occur on the steps of a local courthouse, in a hotel ballroom or in front of the property up for auction. This type of on-the-ground auction has several limitations. First, potential buyers have to visit the local courthouse to access due diligence materials like plat maps and assessments. Second, the advertising for these auctions tends to be focused on the local market, so out-of-town buyers seldom know about them. Third, even if out-of-towners know about the auction, they have to travel great distances just for a chance to bid, and they risk going home empty-handed. Finally, if potential buyers want to bid, they must adjust their schedules to physically attend the auction, often waiting for hours before their property of interest opens for bidding. Some buyers tell stories of standing in rain or snow for hours, just to place their bid on a property.
Fortunately for today’s property owner, the Internet has revolutionized the real estate auction process. The Internet allows potential buyers to search for properties all over the world, view photographs and due diligence materials online, and participate in auctions all across the country, 24 hours a day, all from the comfort of their home or office. Quite simply, it is a very easy way to sell real estate. Thousands of properties are sold by online auction everyday, and now sellers can choose from multiple real estate auction websites to expose properties to a worldwide market.
How can you get in on this new trend? It is easier than you may think. Preparing to sell your home or investment property via online auction begins much like selling it through traditional means. Clean your property as thoroughly as possible, both inside and out, being sure to remove all debris and clutter. Take clear photographs; they are crucial for selling property online. Pictures will “tell the story” better than any text and can make or break a sale.
Follow this checklist for important information to include in your online auction:
Residential Homes and Condominiums
- Provide basic property information such as the street address, number of bedrooms and bathrooms, living space (in square feet), lot size (in acres), and any other special features (i.e., fireplace, hardwood floors, granite countertops, swimming pool, corner lot, located on cul-de-sac, etc.).
- Explain why a person would wish to live in this area.
- Identify local schools, community features, and shopping and their proximity to your property. Also address access to highways and public transportation.
- Discuss the costs connected to the property (taxes, HOA dues, condo fees, approximate costs of utilities, etc.)?
- If the property has a tenant or is in a strong rental market, provide a breakdown of rental income and expenses (expenses may include property taxes, maintenance, etc.).
- If the property is a fixer-upper, be sure to mention necessary work and approximate costs.
- Take several photographs; be sure to take pictures of the front and back of home, the main interior rooms, and any unique features.
- If you can hold an open house, include the date in the auction.
This checklist should also be used for improved property (land that has been built upon), in which the predominant value of the property is the land itself and not the structure(s).
- Provide basic property information such as lot size (in acres), lot shape, whether the lot is treed or cleared or any other special features (good views, adjacent to noteworthy property, etc.).
- Provide an address, parcel number, and/or “legal description” of the property.
- Obtain a plat map from your county assessor’s office. If it is not available electronically, you can use a scanner to digitize the map for inclusion in your auction.
- Explain what utilities are available to the property. If sewers are not available, disclose whether the property has had a perc-test (for a septic system).
- Contact your county zoning office. Verify the zoning code and what it allows for.
- If the land is ready for development, tell why a person would wish to build a home in this area and describe local schools, community features and shopping.
- Take several photographs of the property, the street on which it is located, and the area attractions. Your main image should show the most appealing view of the property. Think of what you’d want to see if you were a buyer!
Many online resources can help you gather information and perform due diligence for your auction. Google has free satellite maps, and Microsoft provides 3D satellite maps. RealtyTrac provides a free home value analysis and offers Premium Property Reports for valuating your home.
Bid4Assets.com and Bid4Homes.com are real estate online auction websites for home sellers, private investors and REO asset managers. RealtyBid.com is an online auction site for real estate agents. These sites and others provide online tutorials and often live customer service to help you get started.
Bid4Homes is an online auction site for real estate, selling more than 50,000 properties since 1999.