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Real Estate Auctions: Not Just For Foreclosures Anymore

Two years ago, I started paying MLS, NAR, CA, and SDAR dues.  Since my wife Debra was taking on more of the lending responsibilities, I spent the bulk of my time working with the real estate agents.  Having MLS access allowed me to hold broker opens for my agents, hold open houses for their listings, and act as a de facto “buyer’s agent” for them when they were out of town.

I had a few “orphan” clients and, in the past 30 months,  I represented about a dozen buyers and listed and sold two properties as a real estate agent.  It’s not something I love but understanding the brokerage side of the business enhanced our knowledge as lenders.  We understand contracts, deadlines, contingencies, and conversations with our agent clients better.  Throwing mom and dad in the station wagon, showing homes, writing offers, meeting property inspectors, negotiating repairs, and closing deals has made us better lenders so I’m grateful for the experience.

Eight years ago, a local hedge fund type started an online real estate auction site.  I wrote about it here and was tangentially involved but it never really took off.  I think it was more because of the online component and less of the auction component.  Generally speaking, when tech types and hedge fund guys try to disinternediate the local brokerage, they lose.  Greg wrote about the next flop yesterday.

I have always been intrigued with auctions so it shouldn’t surprise you that I have followed Harcourts, the New Zealand real estate brokerage’s entry into the Southern California market.  Harcourts has been holding non-distressed auctions for two years now with tepid results.  I had a few thoughts about why its results are mediocre so I started to form a new firm; California House Auctions.

We are a vendor.  We have an exclusive agreement with one of the top auctioneers in California.  He’s held over 600 auctions in the past thirty years and is well known in the community.  We’ll be helping ANY real estate brokerage to sell their (non-distressed) listing through a live auction.  We’ll charge a fee for each successful auction (paid at close of escrow to a licensed real estate brokerage).

I am still slogging through some legal and licensing stuff but we should hold our first auction later this month.

That’s my latest scheme and I hope to get your input as we progress.  We think this could be a great way to sell non-distressed properties and we think the live auction on the front lawn will help our brokerage clients earn more listings from the neighbors.

I’m thrilled we kickstarted RE.net2.0 and can’t wait to see what all of you have been doing these past five years

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