REOs Popular on the Auction Block
Realtors and banks are gaining more confidence in selling slow moving properties and REO properties on the Internet. According to a report commissioned by the National Auctioneers Association, the most significant growth among all types of auctions during 2006 was seen in residential real estate auctions, which generated $16 billion.
Another prime example of this growing trend in the online auctioning of REO properties is the record-breaking 2006 numbers that the online real estate auction firm RealtyBid.com experienced.
According to RealtyBid.com's 2006 figures, the number of properties offered for auction on RealtyBid.com in 2006 increased by more than 53% over 2005. RealtyBid.com's 2006 inventory of properties offered for auction represented $251 million in asset value. In 2006, RealtyBid.com property sales increased by more than 57% over 2005.
In October, RealtyBid.com's monthly inventory of properties "up for auction" topped more than 1,000 for the second time in four months and just the second time ever. October's inventory of 1,038 properties was an increase of 421% over October 2005.
"Auctions are becoming more popular, but based on market factor, REO auctions are becoming more popular," said Tony Isbell, president and CEO of RealtyBid.com.
Looking at the NAA's year-end numbers from years past, the growth of real estate auctions becomes even more evident. Over the span of the past four years, from year-end 2002 to year-end 2006, residential real estate auctions grew by 56.8% to $16 billion from $10.2 billion.
Online real estate auctions have become a big part of the mainstreaming of real estate auctions. RealtyBid.com has sold more than 5,000 properties online and currently sells an average of more than 200 properties online per month, 90% of which, according to Mr. Isbell, are REO properties.
Mr. Isbell pointed out that the trend for residential real estate auctions is up dramatically, especially for REO properties. "I've been in the business for 20 years and there's never been as much excitement for residential auctions than there is now. This is probably due to eBay and Amazon giving people confidence to bid on items online. It's now rolling over into the real estate market."
He added that the rise in the auctioning REO properties is due to the increase of REO properties in general. "You've got record foreclosures, you've got financial institutions with unlimited resources looking at the fastest way to sell properties, so they're looking at ways to accelerate the process. Auctions are one of the ways to do that.
"Residential real estate auctions are the fastest-growing sector of the auction industry, growing 12.5% in 2006," said Mr. Isbell. "And we expect to triple our business volume in the next two years."
RealtyBid.com has included the implementation of upgraded server technology to improve security and reliability. The company has taken advantage of new technology to create a more visually pleasing user experience and executed a more scalable system, meaning that it is able to increase the system's ability to handle growing amounts of work in a more graceful and efficient manner.
It only makes sense to continue to improve the site with the most up-to-date technology and to make modifications to meet the specific needs of the clients, said Mr. Isbell.
"With more than 5,000 properties sold, our approach works because it is beneficial for all parties involved. All of these factors have lead to a need on our part to continually upgrade RealtyBid.com."
Investors and consumers can bid and purchase real estate with the click of a mouse through the Tulsa, Okla.-based real estate auction company of Williams & Williams. "Online Only Auctions" exposes sellers to potential investors worldwide, rather than just locally, and provides buyers with a larger pool of available investment properties.
Through "Online Only Auctions," bidders can easily register, search and bid on properties for free with no upfront deposits. They now have 24-hour access to properties with auctions held each month and closing on the properties within 30 days of the sale.
"Online Only Auctions" are an innovative tool for investors who are looking to add properties to their portfolio, often for purposes of purchasing, renovating and re-selling. Through "Online Only Auctions," these investors can save tremendous time and money, no longer needing to travel to the physical property location.
The local investor market has become saturated," said Dean Williams, president and CEO of Williams & Williams. "Declining local markets are now 'buyer markets,' and buyers are waiting for sellers to continue to drop their prices. A program like "Online Only Auctions" targets these markets and help bring the investors to the properties that much quicker."
Properties can be submitted for auction at any time and can be placed online for sale during the next available online auction cycle. The company then markets the properties both nationwide and locally via a variety of channels, including property signs, direct-mail, print advertising, e-mail auction alerts and the Web site.
(c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com