Bid for your home ONLINE!
April 9, 2008
By MICHAEL COIT
THE PRESS DEMOCRAT
In an era where you can bid on everything from Beanie Babies to boats on the Internet, it was only a matter of time before you could auction off a house online.Some home sellers in Sonoma County are turning to Internet auctions, tired of waiting for their houses to sell during the region’s worst real estate slump in more than a decade.
The traditional way of selling a home takes four months, on average, in Sonoma County. An auction offers the prospect of selling a home in a defined time period, rather than watching it sit on the market and continue to go down in value.
“We get the seller the fair market value on a specific date,” said Stacy Kennedy, spokeswoman for Sima Auctions. “It’s the time value of money. When they choose the date of the sale, they can calculate holding costs and move on.”
But just like the old-fashioned way of selling a house, there is no guarantee a buyer will offer a realistic bid to purchase a home during an auction.
One local Internet auction staged by Pleasanton-based Sima ended Tuesday evening without a sale agreement. The Penngrove estate attracted 22 bids, topping at $1.79 million, but none reached the minimum price set by the seller.
The Penngrove family decided to put their home on the auction block after the house sat on the market for six months, with the price listed at $2.45 million.
“They wanted to try it because of the timing, to sell more quickly,” said Erick Larson, their agent with Sotheby’s International Realty in Sonoma.
Next week, a luxury home in the Fountaingrove area of Santa Rosa that hasn’t sold for $1.19 million after two months is set to go up on Sima’s Internet site, with bidding starting at $899,000.
The successful bidder must exceed an undisclosed minimum price, known as a reserve. If the winning bid equals or tops the reserve, the seller must do the deal.
“It’s a gamble. The auction will tell you in a short period of time what your house is truly worth in today’s market. It’s a good snapshot,” said Jim Scally, a real estate analyst with North American Title Company in Sonoma County.
Online and off, residential real estate is the fastest-growing area in the auction industry. Sales of homes through auctions increased 47 percent from 2003 through 2007, according to the National Auctioneers Association. Last year, the group launched a Web site listing real estate auctions in a multiple listing style format.
Most real estate auctions are conducted at home sites, with some also simulcast on the Internet for bidders who can’t attend. Internet-only auctions are on the rise, said Chris Longly, an association spokesman.
“We’re seeing a lot of new growth. The Internet allows you to market to a much larger audience,” Longly said.
In Sonoma County, real estate auctions are relatively rare. Most in the past year have been more traditional live sales by developers needing to sell condominiums in bulk quickly.
Sima Auctions, a Pleasanton company founded by real estate agents who also are accredited auctioneers, recently started marketing its Internet auction service in Sonoma County.
Most of the firm’s auctions are done at home sites, but Sima officials said more sellers are looking to Internet auctions.
“We believe the Internet auction is the most advanced and certainly the fastest-growing element in the real estate auction industry,” said Steve LaRocque, a Sima co-owner.
For buyers, the Internet provides anonymity and a way to purchase property without sitting in a room shouting out prices with other bidders.
“There are a lot of people who are uncomfortable, who have experienced live auctions and won’t go back,” LaRocque said.
The Penngrove family figured an Internet auction would generate new interest in their home. They started the bidding at $999,999, less than half the original listed price, Larson said.
“This is trying to speed up the process,” he said.
Interested buyers had several opportunities to walk through and inspect the 3,700-square-foot, five-bedroom home on 5 acres.
Bidding was done online with each bid disclosed, including whether the reserve price had been met.
A successful bidder must pay a deposit with a credit card online, with deposits typically between $1,000 and $5,000. The buyer then must pay 10 percent of the sales price within 48 hours.
A premium, paid by the buyer, is added to the final price to cover agent commissions and fees. The premium was 10 percent for the Penn-grove home.
“We love real estate agents. They might see us as a tool,” LaRocque said.
More real estate agents are seeking training to become certified auctioneers, Longly said.
Santa Rosa agent Craig Saxon, who has sold homes for 25 years, earned the certification and now offers clients the option to auction homes.
“It’s more transparent than the traditional list-and-sell because the buyer knows that someone sitting next to them is willing to pay about the same,” Saxon said. “Internet auctioning is an option. I may do that with other properties.”
You can reach Staff Writer Michael Coit at 521-5470 or
mike.coit@pressdemocrat.com.
© http://www1.pressdemocrat.com/article/20080409/NEWS/804090321/1036/BUSINESS01
SIMA Auctions * Real Estate Auction Experts * 