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Category Archive: ‘Auctions’

Online Auctions of Homes

If these home-auction companies spent $100 million per year on advertising, they could go mainstream – and pressure realtors to justify their existence.  Thankfully, sellers resist anything that sounds like they might give it away:

According to comScore, online sales so far this holiday season (November 1 – present) have risen over 16% against last year’s figures from the same time. Housing prices are also accelerating month-over-month and are predicted to reach pre-recession prices by mid-2015 ( With the average online purchase sitting at $180.94 (as of this year’s second quarter), selling real estate online seems like an unlikely scenario.

However, heavyweights in the online real estate auction space such as and are thinking otherwise. Both companies use an online auction model to sell homes to investors and would-be investors online; however, during this holiday season, both seem to be testing ways to give online home buying more mass market appeal.

Are we witnessing the marriage of e-retailing to real estate?

One example suggests the answer to this is yes. Homesearch recently brought on a new CEO, Kal Raman whose background as an eBay/Groupon executive may foreshadow where the industry’s headed. Earlier this month, Homesearch joined the Cyber Monday craze by launching what seemed to be the industry’s first Cyber Monday sale packed with discounts and buyer incentives on homes. These properties were auctioned online through Homesearch’s typical online auction process.

Their most recent promotion though consists of a “buy it now” price, similar to that of eBay, so instead of actually bidding for a home through an online auction, consumers will call Homesearch to receive a price via telephone. If a consumer likes the price and the extra incentives offered, they can purchase the property before it goes to auction (Homesearch handles much of the downstream closing process already). As eBay’s strategy made clear, there are masses of people who are uncomfortable joining an online auction but who react very well to bargain-basement fixed prices.

Given that Homesearch continues to grow their network of real estate agents and broker partners, is it a stretch to imagine the day when an agent shows homes in the neighborhood and then takes their client online to purchase?

In a space where nothing like this has been tested before it’s hard to know for certain how successful Homesearch and others will be trying to scale mass-market retailing strategies to real estate. However, if they’re really able to go the retail merchandising route and apply discounts of 20%-50% off the list price of homes for sale, I can see how people might be inspired to buy their next home online.

Posted by on Dec 16, 2014 in Auctions, Jim's Take on the Market, Thinking of Selling? | 13 comments

Why Sell Early

Sellers expect their listing agent to toil for weeks and months searching for the right buyer for their home.  Let’s face it, that’s how other jobs work - the desired result comes at the end of the effort.

But it’s the opposite when selling a house.  The tight inventory has left anxious buyers waiting for the next new listing to come along, and when it does, they pounce on it in the first few days.

This is why Zillow has become the go-to website for buyers.  Zillow provides transparency with several great features (and the zestimate is down the list):

1.  Zillow shows how long the property has been listed for sale, and how long the property has been on Zillow.  The ‘re-freshing’ of listings isn’t fooling buyers, because Zillow divulges the truth.

2.  They track how many times the property has been viewed on Zillow, which is a secondary ‘sniff test’, much like the days-on market stat.  Once a property has been seen hundreds of times, the buyers start wondering why it hasn’t sold (much like the DOM count):

stale meter

3.  Savvy buyers know that the zestimate is a rough guess of actual value.  But Zillow backs it up nicely with three similar listings nearby, AND the last three closed sales – all on the same page!

4.  They also show how much the seller paid, and when.   Buyers will grant sellers the right to make a profit, so only the greedy are harmed here.

5.  The categories of homes for sale on Zillow are prioritized by date listed.

These data points are all in a seller’s favor during the first few days the home is on the market – use them wisely!

The best thing that could happen to the market is a mass marketing campaign by Zillow (or anybody) to explain to sellers that the urgency created in the first few days on the market should be used as a selling tool.  Then, at some point, maybe we can convert to an auction-like format to sell houses!

Posted by on Nov 14, 2014 in Auctions, Jim's Take on the Market, Listing Agent Practices, Thinking of Selling?, Why You Should List With Jim | 14 comments

No Shills…..Almost

Just had to hedge it a little….from CAR:

This law, on and after July 1, 2015, with respect to an auction that includes the sale of real property, prohibits a person from causing or allowing any person to bid at a sale for the sole purpose of increasing the bid on any real property being sold by the auctioneer.

The law, however, does allow an auctioneer or another person to place a bid on the seller’s behalf during an auction of real property if notice, as specified, is given that liberty for that bidding is reserved. The law also requires in this regard that the person placing that bid contemporaneously disclose to all auction participants that the particular bid has been placed on behalf of the seller.

The law exempts a credit bid made by a creditor with a security interest in the property that is the subject of auction when the credit bid can result in the transfer of title to property to the creditor.

Finally, this law prohibits a lender or an auction company that is retained to control aspects of a residential real property transaction from requiring, as a condition of receiving a lender’s approval of the transaction, a homeowner or listing agent to defend or indemnify the lender or auction company from any liability alleged to result from the actions of the lender or auction company and declares a clause, provision, covenant, or agreement in violation of this prohibition to be against public policy, void, and unenforceable.

Assembly Bill 2039 (codified as Civil Code §§ 2079.23 and 1812.610) (effective July 1, 2015).

Posted by on Oct 15, 2014 in Auctions | 6 comments

REO-Auction Contest Results

My high school baseball coach used to say,

“I don’t believe anything I hear, and only half of what I see!”

In our latest contest, readers submitted their guess at the highest bid + 5% buyer’s premium for this property in SE Carlsbad:


The auction included an outrageous set of conditions, which many thought would drive down the price to compensate.  They included:

  1. The 5% buyer’s premium tacked onto the highest bid.
  2. No showings.
  3. Tenant-occupied, and buyer was responsible for evicting.
  4. Cash only.
  5. No buyer’s agent commission paid.
  6. Not in the MLS.
  7. 5% deposit required upon winning.
  8. Reserve price.

They conducted the auction online, which gave participants the convenience of bidding from their couch at home. It should have allowed bidders the chance to double-check the comps as the auction wore on – because every time a new bid was made, they extended the ending by 1-2 minutes.

Those checking the comps would have seen that in the heat of the frenzy last year, three of this identical model sold for $638,000, $653,000 and $679,000.  Then in October this sale with nice view closed for $705,500, which was the highest price since May, 2007:

The bank foreclosed in 2011, and nobody wanted it then for $459,088.  The opening bid this week was $325,000, and once the auction started the initial bid increment was $25,000.

Most of our readers guessed it would sell in the $400,000s, which would be an adequate buffer to evict and remodel.

Look what happened today:



Somebody was willing to pay almost $200,000 more than the bank didn’t get in 2011, and that wasn’t enough to reach the reserve price?  Hopefully the bank will come to their senses and reconsider before that bidder changes their mind.  Counting the 5% buyer’s premium, the highest bid was $678,038!

Our closest and winning guess was $568,050, and submitted by blucore – congratulations!

Posted by on Jun 9, 2014 in Auctions, Contests, REOs, REOs for sale, Unbelieveable | 15 comments

Auction Pearl

Do you get a deal buying a house at auction?  Could auctions be the future?

I taped this in January to test out whether you get a deal going this route, or end up paying retail….or more.  I knocked off 20% or $100,000, which makes my prediction of retail value between $468,000 and $485,000.

I thought it might go higher:

Posted by on Apr 1, 2014 in Auctions, Bubbleinfo TV, Jim's Take on the Market | 1 comment

RE Auctions Going Mainstream?

Someone who puts together an auction hybrid and is realtor-friendly could have a big impact on how real estate is sold.  But these guys are a brokerage, so it’s them against the realtor world.  From HW:

DetroitA new company is offering homeowners a new way to sell their home.

SellerNation, a Detroit-based company, combines the urgency of a real estate auction with the expertise of real estate brokers to speed up the home-selling process.

“This new brokerage is a hybrid of the best of real estate auctions and the best practices of real estate brokers – the perfect combination,” says CEO Rod Carey.

“Real estate auctions are great because everyone knows what day a property is going to sell,” says Ron Jasgur, SellerNation president.  “They level the playing field and create a sense of urgency in the marketplace.”’

What makes SellerNation different is its 34-day listing agreements. The company also contributes 5% of its revenues to local non-profit organizations.

SellerNation does not take on buyers as clients. It focuses solely on sellers and provides transparency throughout the sales process, making it “ideal in cases like divorce, estate sales, and probate situations where it could be difficult to keep multiple parties on opposing sides on the same page.”

SellerNation also does not charge sellers a commission. Instead, the company adds a 5% buyer premium to an accepted bid.  A common element of auctions, it’s also becoming a trend among traditional home sales. The National Association of Realtors’ 2013 Profile of Home Buyers and Sellers revealed that 13% of homebuyers compensated the Realtors in whole or in part.

“Everything we do is designed to make our listings attractive to multiple buyers, because competition is what drives price,” says Jasgur. “We’re literally built to negotiate with multiple parties to get the best possible deal for the seller. We’ve seen over and over again that the first offer is rarely the best.”

Posted by on Apr 1, 2014 in Auctions, Listing Agent Practices, The Future | 3 comments Loads Up

googlecapitalIf N.A.R.,, and/or other industry leaders don’t get out in front of the changing market, then those with the big bucks will put an attractive spin on their model and try to determine our future.  From

Fresh off its public debut last week, Google Capital is putting more money to work this week with the announcement of a $50 million investment in real estate marketplace The valuation of the company post-money is $1.2 billion, and a representative from Google Capital will join the company’s Board of directors and another will take a board observer position.

Similar to other real estate marketplaces, connects buyers and sellers of real estate. And the company has sold $26 billion of property since inception. What differentiates is that the real estate transaction actually happens online. It’s been described as an “eBay for real estate.” Financing options remain the same as in the offline world (it happens via a bank). Similar to eBay, the highest bidder wins on these auctions.

Launched in 2008, only started expanding in Silicon Valley last year, with the company’s headquarters in Southern California. And while has raised money from private equity, it hasn’t used much of its unvested capital and is profitable.

Of course, you can draw comparisons to other real estate marketplaces like Zillow or Trulia. As Jake Seid, president of, explained in an interview, “Trip Advisor is to Priceline as Zillow is to” He sees sites like Zillow as complimetary.

Read full article here:

Posted by on Mar 5, 2014 in Auctions, Listing Agent Practices, The Future | 0 comments

Short-Sale Deals?

searchingforshortsalesBuyers hoping for a deal will have to look high and low these days – because sellers are typically the most optimistic early in the selling season.

Maybe a bank-owned REO?  Don’t get your hopes up, there have only been seven REOs listed in San Diego’s North County coastal region over the last six months.

How about a short-sale?  There have been 38 listed in the same period, but with the lighter load these days, the servicers have been more diligent about selling for full value.

But I heard this story today which could help – maybe?

NationStar Mortgage requires short-sellers to first submit their home to for sale – BEFORE the house gets inputted onto the MLS. gets a few days to sell the house to the highest bidder, based on a sales price that they determine after sending out an ‘inspector’ or two.  Not sure if they are assessing the condition and/or value, but we know how operates, and their system has one troubling flaw:

Their opening bids are ridiculously low to attract the maximum eyeballs - and once you put an ultra-low price on a house, it is hard to recover.

Here is an example:

This has been on the MLS since September, listed for $1,300,000 (apparently the agent didn’t get the memo about the new process):

But starting today and going until January 5th, you can bid on-line to purchase the property, with the opening bid starting at $500,000.  They also advertise it as being a ‘Bank-approved short-sale’:

We’ll check back to see if they are having any luck – I have seen this house and we couldn’t get out of it fast enough. It is a wreck of a floor plan that has divided the house into two units inside.

The success of this program will be up to the lenders. Because positions the offering to be a screaming deal, the lenders will have to be generous about their reserve prices.

But if they are going to do that, why not just foreclose and get paid immediately, and have the trustee-sale buyer worry about gettting the former owners out of the house?

The original mortgage on this house was $1.45 million, and it looks like no payments have been made since 2010. The balance owed is over $1,800,000.  Do you think the reserve price will be under a million?

Realtors should breathe a little easier too about’s attempts to get into residential resales.  I doubt many regular home sellers will agree to an opening bid that less than half of their perceived value.

Posted by on Jan 2, 2014 in Auctions, Jim's Take on the Market, Short Sales, Short Selling | 7 comments