We’re pleased to see the Los Angeles Times Media Group embracing the use of auctions for the sale of non distressed real estate. http://www.latimes.com/business/la-fi-times23-2008aug23,0,3290447.story
From what we can tell they are basically following the same model that eBay and other auction posting organizations are doing. They’re not adhering to the traditional real estate auction model which requires knowledgeable professionals to evaluate the real estate, select the proper auction process, create viable minimum bids and or reserve prices and create credibility that at the end of the auction process the property will in fact be sold.
Kudos to them – in our experience of being the leader in the real estate auction industry for some 40 years plus, the ZetaBid venture will simply expand the acceptance of the auction process for selling quality US real estate as is the case in other parts of the world like Australia and the U.K. (Click here to read the article in National Real Estate Investor Magazine that ranks us as the top real estate auction company: http://nreionline.com/finance/investors/real_estate_hear_bid_0701/index.html)
Integrating Live With Broadcast
There are many ways to integrate online and offsite bidding for real estate auctions beyond just conducting the whole auction online. Sheldon Good & Company has done this successfully on several occasions.
Simulcasting Online
In Jackson Hole, WY we simulcast the live real estate auction online. 85% of the bids came in online from buyers who saw the property but it felt it was not convenient to return for the auction. We had similar results for two subsequent auctions of fractional at the Teton Club. Click here for an article that helped promote the auction and the online bidding component http://www.snowboard-revolution.com/news/Properties-to-be-auctioned-at-Jackson-Hole.html and here to see how the online component of the auction worked and to view results of the auction: http://www.proxibid.com/asp/AuctionsByCompany.asp?ahid=1206.
Phone Bank Bidding
We’ve employed phone bank bidding in several real estate auctions. At Grand Summit in Park City, UT, the auction was conducted in Salt Lake City but we operated a phone bank with 6 people taking bids which worked really well. Click here to read all about it http://lhonline.com/mag/auctions_redux/.
Phone Patch
A similar tactic was integrated when Sheldon Good & Company conducted three auctions of large portfolios of real estate, this time manufactured homes for the client Affordable Residential Communities. Click here to read the press release http://www.sheldongood.com/news.php?id=7&listing=206 and an article about the auction http://www.bizjournals.com/denver/stories/2005/10/31/daily69.html. The properties were located all over the US. For the second and third auctions, we employed a phone bank where bidders called in and were patched in to the auction via conference call, then bid by hitting pound. An operator manned a computer at the auction would connect to the person to get information about their bids.
Simulcasting
This technology helped sell the Trump Plaza via real estate auction in West Palm Beach, FL. The market was scattered across the Eastern seaboard. Therefore, we conducted the physical auction in Palm Beach, and then simulcast it in New York and Chicago. 60% of the bids were from Palm Beach, 25% from New York and 15% from Chicago. This auction is mentioned in this article, click here http://sf.therealdeal.com/articles/real-estate-auctions-spark-sales.
Steve Good is Chairman and CEO of Sheldon Good & Company. He is an attorney, Accredited Auctioneer of Real Estate, licensed REALTOR in several states and author of a top-selling book; Churches, Jails and Gold Mines...Mega-Deals from a Real Estate Maverick (Kaplan, hardcover). The book features an afterword by Donald Trump.
Wednesday, August 27, 2008
Monday, August 18, 2008
The World Loves Auctions
On July 27, 2008, an article appeared in the St. Petersburg Times (http://www.tampabay.com/news/business/relaestate/article742807.ece) called, “Desperation Bid.”
In this article the reporter references several people who have tried to sell their homes conventionally without success, so they turned to eBay.
One of the homeowners is quoted as saying, “The exposure you get on eBay is priceless.”
This point is illustrated perfectly in my article, “The eBay Effect” http://www.sheldongood.com/news.php?listing=253.
I wrote the article in 2007 for the Certified Commercial Investment Member (CCIM) Institute in conjunction with one of our associates here at Sheldon Good & Company. We addressed how eBay’s popularity has improved the appetite for using auctions to sell all sorts of goods, and that the regular use of auctions to sell personal property and other like items has basically removed the taint of distress historically associated with real estate auctions.
In a nutshell, the world loves auctions.
It is therefore curious that the author of this article equates the use of auctions for real estate via eBay as an indicator of distress sales.
Simply put, if everything else listed on eBay is being sold for good reason without distress, why is real estate sold on eBay automatically assumed to be distressed?
The fact is, it isn’t.
Our firm has vast experience conducting real estate auctions for all sorts of properties – we’ve handled over 40,000 auctions since 1965 in over 100 different asset classes, often to sell commercial or industrial property, real estate that’s difficult to value or high end trophy residential property.
There are plenty of times when a seller opts to use an auction because their property is difficult to value, or to expand the market beyond a certain geography. An auction can help a property owner understand where the market lies for the property. The competitive nature of an auction is exciting because the buyer can compete directly with the other potential buyers, and the seller benefits because they obtain maximum value for their property.
As pointed out in our CCIM Magazine article, using eBay as a real estate auction tool isn’t really a binding process. It is merely a posting mechanism for sellers and buyers. No binding bids are received, it is simply an invitation to negotiate which may or may not produce results.
The reality is that the process eBay uses for real estate is not consistent with the auction process being used by companies like ours. There is a difference in quality of auctions. The sellers in the Tampa Bay area may not have had success with eBay simply because that wasn’t the right auction methodology or sales venue for their property. In 2007, according to the National Auctioneers Association, the amount of real estate sold at auction was $58.5 billion dollars – that’s an increase of over 25% since 2003.
Steve Good is Chairman and CEO of Sheldon Good & Company. He is an attorney, Accredited Auctioneer of Real Estate, licensed REALTOR in several states and author of a top-selling book; Churches, Jails and Gold Mines...Mega-Deals from a Real Estate Maverick (Kaplan, hardcover). The book features an afterword by Donald Trump.
In this article the reporter references several people who have tried to sell their homes conventionally without success, so they turned to eBay.
One of the homeowners is quoted as saying, “The exposure you get on eBay is priceless.”
This point is illustrated perfectly in my article, “The eBay Effect” http://www.sheldongood.com/news.php?listing=253.
I wrote the article in 2007 for the Certified Commercial Investment Member (CCIM) Institute in conjunction with one of our associates here at Sheldon Good & Company. We addressed how eBay’s popularity has improved the appetite for using auctions to sell all sorts of goods, and that the regular use of auctions to sell personal property and other like items has basically removed the taint of distress historically associated with real estate auctions.
In a nutshell, the world loves auctions.
It is therefore curious that the author of this article equates the use of auctions for real estate via eBay as an indicator of distress sales.
Simply put, if everything else listed on eBay is being sold for good reason without distress, why is real estate sold on eBay automatically assumed to be distressed?
The fact is, it isn’t.
Our firm has vast experience conducting real estate auctions for all sorts of properties – we’ve handled over 40,000 auctions since 1965 in over 100 different asset classes, often to sell commercial or industrial property, real estate that’s difficult to value or high end trophy residential property.
There are plenty of times when a seller opts to use an auction because their property is difficult to value, or to expand the market beyond a certain geography. An auction can help a property owner understand where the market lies for the property. The competitive nature of an auction is exciting because the buyer can compete directly with the other potential buyers, and the seller benefits because they obtain maximum value for their property.
As pointed out in our CCIM Magazine article, using eBay as a real estate auction tool isn’t really a binding process. It is merely a posting mechanism for sellers and buyers. No binding bids are received, it is simply an invitation to negotiate which may or may not produce results.
The reality is that the process eBay uses for real estate is not consistent with the auction process being used by companies like ours. There is a difference in quality of auctions. The sellers in the Tampa Bay area may not have had success with eBay simply because that wasn’t the right auction methodology or sales venue for their property. In 2007, according to the National Auctioneers Association, the amount of real estate sold at auction was $58.5 billion dollars – that’s an increase of over 25% since 2003.
Steve Good is Chairman and CEO of Sheldon Good & Company. He is an attorney, Accredited Auctioneer of Real Estate, licensed REALTOR in several states and author of a top-selling book; Churches, Jails and Gold Mines...Mega-Deals from a Real Estate Maverick (Kaplan, hardcover). The book features an afterword by Donald Trump.
Friday, August 1, 2008
Auctions Are Here To Stay
On July 31, 2008 the Mobile Press-Register wrote an article about real estate auction activity taking place on the Alabama Gulf Coast.
http://www.al.com/business/press-register/index.ssf?/base/business/121715022486380.xml&coll=3
Sheldon Good & Company President Alan Kravets offers some pertinent commentary on this article:
Auctions are here to stay. They are not increasing in use just because of a down market. Auctions work well in a rising or falling market.
In a market like Baldwin County where supply exceeds demand and it’s acknowledged as a great place to own a residence on one of the best beaches in America, the auction provides the buyer with the opportunity to name their own price without negotiation. The Seller can use the auction as a call to buyers that they are ready and willing to sell – at San Carlos – at least 15 units.
The auction price will be the market for those units and will be accepted as such by appraisers and lenders.
According to the National Auctioneers Association 2007 report, the auction industry grew 5.3% to $270 billion dollars in 2007. This is a more than 30% increase since 2003. Real estate comprises 22% of the $270 billion industry with a whopping $59 billion in real estate sold at auction.
Please note that any time there is this volume of sales, there is a commercial and legal framework by which this is accomplished.
Alan Kravets is President and General Counsel of Sheldon Good & Company. He is a licensed real estate broker in 15 states.
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