Need fast cash? Put your house on the block
An online home auction probably won't fetch the best price - but for sellers in dire straits, it will get a deal done ASAP.
(Business 2.0 Magazine) -- Last spring, Curtis Burttram found himself in a bind. His wife was battling a serious illness, the couple was sitting on two small rental properties near their home in rural Albertville, Ala., that they didn't have time to manage, and prices in the area had begun to slip.
Reluctantly, Burttram put the pair of two-bedroom homes on the market - where they sat for six months without an offer. Increasingly desperate, he took a flier on a new strategy. He listed one of the houses on an online home-auction site called RealtyBid.com, a new eBay-like service for home sellers.
After a two-week bidding period, not only did Burttram have four bids, but he got his minimum asking price of $11,500, just $500 less than his original listing. (You read that correctly: You can nab a three-bedroom house in the area for less than a Chevy Cobalt.)
Three weeks later he closed the sale. Then he listed the second home, and it closed just as fast. The auctions wound up saving him money - and incalculable stress. "It's a different approach," Burttram says. "But it accomplished what we needed in a fast and hassle-free way."
With 39 percent more properties nationwide sitting on the market than last year, Burttram is one of a growing number of motivated sellers looking to move their homes fast in slow markets.
While eBay also offers residential property listings, its auctions aren't legally binding - buyers' only risk is receiving negative feedback if they pull out of a deal. RealtyBid, on the other hand, is one of the first online services to require buyers to sign on the dotted line. The service has already handled more than $200 million in residential real estate transactions, and RealtyBid CEO Tony Isbell expects that figure to triple by the end of 2007.
Here's how it works: First, you need an agent to list your home. (The good news here is that you can negotiate the commission, since the agent won't have to do any legwork to sell it.) For a $100 fee, you get your house listed for 14 days, a yard sign, and a marketing e-mail blast sent to agents in the county where the house is located.
As with eBay, you set a starting price and a minimum reserve. When the reserve is met, the agent sends a contract to the winning bidder, who must sign papers and send back a 5 percent deposit.
Bear in mind, Burttram's story is the exception, not the rule. Homes on RealtyBid often go for as much as 20 percent below asking.
"Sometimes it makes sense to take less money to get that money immediately," says Glenn Mayernick, a New York real estate agent who recently helped a couple sell their house - originally listed at $440,000 - for $340,000 on RealtyBid and has sold 10 houses through online auctions in the past year. Isbell, meanwhile, is taking the model a step further: He just launched Condobid.com.
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