The Big Kahuna: eBay
How can you use "auction" and "online" in the same sentence and not follow them with "eBay"? From its roots in swapping Beanie Babies and comic books, eBay has evolved into an amazing marketplace where items of every stripe may be sold for fixed prices or auctioned to the highest bidder. As an online auction venue, it's a little bit like an empty lot rented out for a weekend flea market. The venue takes no responsibility for what goes on within, which can be a relatively small matter if you're buying a used CD and quite another if you're buying real estate. Some consider it one of the purest of the "many-to-many" Internet model. Fans swear by it. Newcomers might well be advised to start on items smaller than condos and ranches.
It certainly has its advantages. In New York last December, an early-season snowstorm struck the weekend a studio apartment was set for the auction block. In the real world, the auction might have been poorly attended or even cancelled. But on eBay it went off as scheduled and nobody got stuck in the snow, got their feet wet, or slipped and fell on the ice. The hitch? The lackluster bidding generated a handful of low bids, and when the bidding was over there were only two offers above the reserve price. Several days later the seller was still considering them, along with some offline offers. He had no obligation to sell, and the bidders had no obligation to buy.
Still, some unusual properties were sold on eBay Real Estate last year, including an island in the Virgin Islands, a converted 747, and a former missile silo (which went for $2.1 million). But what's really happening at eBay Real Estate isn't about individuals trying to unload their own apartments or celebrities looking for a publicity stunt.
"Homebuyers never really know what's happening between agents," says Doug Galen, vice president of eBay Real Estate. "Price negotiations take place inside a black box. What eBay does is break open the black box and make pricing transparent. The process feels more trustworthy to a consumer."
There's no way to tell how many eBay listings result in actual sales, since the transactions take place offline. But the company had 144,000 real estate postings in 2002, with an average of 1,000 viewings for each property listed. That starts to sound like more than Beanie Babies, and real estate companies are starting to take note of the new kid on the block.
Galen says that online auctions aren't a bad thing for real estate agents. Unlike travel agents, who found themselves scrambling to compete with online ticketing services, real estate agents can use auction technology to help, not hurt, their business.
"A real estate agent's true value isn't the transaction — it's the knowledge and expertise to guide a consumer through the morass of decisions that need to be made," says Galen. And with the amount of traffic each listing gets, putting a property on eBay can be the "ultimate open house." After all, asks Galen, "what agent wouldn't kill for a thousand new leads in a single open house?"
There are four divisions of eBay Real Estate: residential (including new homes, resales, and foreclosures); commercial property; timeshares; and land parcels. Within the residential division, new homes are sold in partnership with companies like iBidCo and BuilderHomesite, and foreclosures are sold through agents. The commercial property area has developed somewhat organically, and there are no partnerships there yet. But the two biggest categories are timeshares and land parcels. Offerings include international and domestic timeshares as well as recreational plots, land ready for development, and investment parcels. More than 15,000 parcels of land were posted on eBay Real Estate in its first year alone, with the total topping 20,000 by the end of 2002.
If it strikes you as unusual that people are buying empty lots, often sight unseen, on eBay, you're not alone. Even Galen admits that it seems like an odd thing to do — at first. "There are people who believe that land values only go up, and this is their chance to own a piece of America," he says. People have different levels of disposable income, he adds, and make different choices about how to spend it. "Some people buy a lottery ticket, some people buy their lottery ticket in the form of land," he says. "Why not?"
Why not indeed? It's no more unusual (or odd) than camping out overnight outside a sales office. And it's certainly more comfortable.
How can you use "auction" and "online" in the same sentence and not follow them with "eBay"? From its roots in swapping Beanie Babies and comic books, eBay has evolved into an amazing marketplace where items of every stripe may be sold for fixed prices or auctioned to the highest bidder. As an online auction venue, it's a little bit like an empty lot rented out for a weekend flea market. The venue takes no responsibility for what goes on within, which can be a relatively small matter if you're buying a used CD and quite another if you're buying real estate. Some consider it one of the purest of the "many-to-many" Internet model. Fans swear by it. Newcomers might well be advised to start on items smaller than condos and ranches.
It certainly has its advantages. In New York last December, an early-season snowstorm struck the weekend a studio apartment was set for the auction block. In the real world, the auction might have been poorly attended or even cancelled. But on eBay it went off as scheduled and nobody got stuck in the snow, got their feet wet, or slipped and fell on the ice. The hitch? The lackluster bidding generated a handful of low bids, and when the bidding was over there were only two offers above the reserve price. Several days later the seller was still considering them, along with some offline offers. He had no obligation to sell, and the bidders had no obligation to buy.
Still, some unusual properties were sold on eBay Real Estate last year, including an island in the Virgin Islands, a converted 747, and a former missile silo (which went for $2.1 million). But what's really happening at eBay Real Estate isn't about individuals trying to unload their own apartments or celebrities looking for a publicity stunt.
"Homebuyers never really know what's happening between agents," says Doug Galen, vice president of eBay Real Estate. "Price negotiations take place inside a black box. What eBay does is break open the black box and make pricing transparent. The process feels more trustworthy to a consumer."
There's no way to tell how many eBay listings result in actual sales, since the transactions take place offline. But the company had 144,000 real estate postings in 2002, with an average of 1,000 viewings for each property listed. That starts to sound like more than Beanie Babies, and real estate companies are starting to take note of the new kid on the block.
Galen says that online auctions aren't a bad thing for real estate agents. Unlike travel agents, who found themselves scrambling to compete with online ticketing services, real estate agents can use auction technology to help, not hurt, their business.
"A real estate agent's true value isn't the transaction — it's the knowledge and expertise to guide a consumer through the morass of decisions that need to be made," says Galen. And with the amount of traffic each listing gets, putting a property on eBay can be the "ultimate open house." After all, asks Galen, "what agent wouldn't kill for a thousand new leads in a single open house?"
There are four divisions of eBay Real Estate: residential (including new homes, resales, and foreclosures); commercial property; timeshares; and land parcels. Within the residential division, new homes are sold in partnership with companies like iBidCo and BuilderHomesite, and foreclosures are sold through agents. The commercial property area has developed somewhat organically, and there are no partnerships there yet. But the two biggest categories are timeshares and land parcels. Offerings include international and domestic timeshares as well as recreational plots, land ready for development, and investment parcels. More than 15,000 parcels of land were posted on eBay Real Estate in its first year alone, with the total topping 20,000 by the end of 2002.
If it strikes you as unusual that people are buying empty lots, often sight unseen, on eBay, you're not alone. Even Galen admits that it seems like an odd thing to do — at first. "There are people who believe that land values only go up, and this is their chance to own a piece of America," he says. People have different levels of disposable income, he adds, and make different choices about how to spend it. "Some people buy a lottery ticket, some people buy their lottery ticket in the form of land," he says. "Why not?"
Why not indeed? It's no more unusual (or odd) than camping out overnight outside a sales office. And it's certainly more comfortable.
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eBay Real Estate (ebayrealestate.com) Find real estate properties using the Real Estate Search tool. Beware of the distinction between classifieds and auctions: If the listing tells you to contact the seller, it's a classified. An auction listing will invite you to make a bid. |
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