Time Limit Bidding: The Next Generation Of Homes For Sale Online
The residential real estate industry has been hit hard in recent years by the recession since 2007. Much of the recession has come to the hands of companies or even “Wall Street” that have failed to provide more transparency to “Main Street” in real terms. equity transaction. As homes were bought and sold, many home buyers had a poor understanding of underlying home values, the mortgage industry, or the complexity of the real estate transaction. In the coming years, the average home buyer will be very cautious when entering into new real estate transactions and there will be a greater demand for transparency and credibility with homes for sale.
What has changed in the market? Real estate properties (or bank owned properties / listings) in the recession have allowed for more tenders to take place. Real Estate Properties (or REOs) provide a greater discount to home buyers as they were previous foreclosures. Since the bank needs to sell the house at a discount, it offers a better opportunity to home buyers and / or investors. REO properties for sale have become very popular and will help transcend the paradigm of online home buying from a world of “offer” to a world of “tender”. In a few years, all residential home purchases will be open to this process and “Main Street” will become more comfortable with the new paradigm.
Online, home buying and selling business models haven’t changed much over the internet years. With web 2.0, the home buyer has clearly received more data, but the business models have still remained heavily ad-driven, handing over leads to real estate agents. Websites like Zillow and Trulia still only generate leads for real estate agents and produce other advertising products or services. A new online paradigm will soon emerge where online bidding and time limit bidding will become the norm. Time-limited bidding restores more confidence to the home purchase transaction by creating visibility for all parties regarding bids on a residential home listing or “for sale” property. Unlike our current system, where a home buyer simply submits an offer to a real estate agent, it is the agent who must work with the seller. The seller can view the offers “behind closed doors” and decide which is the “best and highest”. However, with the online time limit offer, the home buyer can view all offers from all interested parties in a home, whether it is an owner-occupier offer or an investor offer. Also, many REO websites are starting to provide more credible data to home buyers to bid on, be it the original loan amount, property details, score, etc.
With the recession, REO properties offer such a discount to market prices that the new paradigm of bidding may emerge. Bank properties must sell quickly and be priced more attractively than the traditional residential real estate market. Today, there are pop-up websites like GoHoming where time-limit bidding is allowed on REO properties. It will be interesting to see how everything unfolds in the coming months.