Real Estate Brokerage

The Emergence of Online Auctions in the Real Estate Industry

Over the last several years, there has been substantial growth in the number of auctions held and the value of real estate properties sold in auctions. According to the National Association of Realtors, real estate auctions are currently 21.5% of the overall auction market. During 2010, one in every three properties is expected to be sold using an auction model. The trend is increasing for online auctions and it is likely to continue into the future. Online auctions were not feasible in the past due to lack of availability of appropriate technology, as there was no specific dedicated platform for real estate. Recently a few companies have developed proprietary platforms and are utilizing them for conducting their own auction business. Hitherto traditional real estate brokerage firms had no or little access to the technology. Real estate brokerage firms can use online auctions as an additional selling tool in their business.

The traditional method of selling real estate has less transparency. Buyers never knew what the other bids were so they did not know what they were competing against. Sellers didn’t know if they were getting a good price for the home because there was very little competition between buyers. Sellers generally want to sell a home quickly for multiple reasons including a new job, family, etc. but have to often put their lives on hold because it usually takes a long time to sell their home. There was no pressure on buyers to submit a bid in a timely fashion so Homes were on the market for much longer periods of time. For realtors, if they take more time to move home inventory it takes longer to get commissions and the growth rate of their business is reduced. They were also not able to leverage technology to offer any value-added services to their clients in the past. 

Currently, there is such a large supply of foreclosed homes that banks are trying to sell their stock utilizing auction companies who have live and online auction platforms. According to RealtyTrac, a record 2.8 million households were threatened with foreclosure last year and the number is expected to rise to more than 3 million homes in 2010. New companies are starting up who seek to specialize in selling these REO homes by the auction process. These new entrants may also seek to gain a slice of the traditional real estate market in competition with existing brokerage firms. Brokerage firms can get in the online auction business early and not leave the field open to competition from new entrants.

XWAuctions has launched a SaaS online and live auction platform for real estate.  There is no software to purchase or install, it can be branded to your website look and feel, and with this technology realtors can offer new value added services to grow their business and generate additional revenue streams.  Visit www.XWAuctions.com to request a demo of our online and live platform to see how it can change the real estate industry for the better.

About the Author

Shelley Koerber leads online marketing for XWAuctions, a division of X-Wire Technology. With offices in Chapel Hill, NC and Mumbai, India, X-Wire Technology provides IT services to clients around the world. As a Microsoft Certified Partner, X-Wire Technology specializes in product development, technical support, software customization, business automation, ecommerce solutions, web programming, design, and engineering services.

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