Would You Use an Auction Service to List Your Home Instead of an Agent?

Would this work in the San Diego real estate market?

How many of you have attended an auction of some sort? I attended one once as a research project for a buyer that wanted to bid on a home that had gone to auction. One thing I learned is to bring your patience and be quick on your feet. The pace of some of these auction is so feverish that if you leave to use the restroom or get a cup of coffee you just might miss out on bidding on the property you wanted to buy.

California, and it’s current real estate market, are often at the forefront and test ground for many new and innovative marketing strategies so it’s no surprise that San Diego will be the test site. I guess this is just another sign of how the economy and current housing market  inspires people to come up with new ways of doing things.

I just read that a company, which I’m sure most of you have seen an infomercial for, called REDC has joined forces with Auction.com. REDC popularized real estate acutions with most of their events taking place mostly in hotel ballrooms. Can you imagine the chaos of sitting in a ballroom with other buyers?

This same company is using San Diego as it’s test market for an on line version of their auction method. This method is targeted mostly to for sale by owners who want to sell their home on their own. From the article I read there’s a fee 0f 1% for listing your home through them with more option at extra cost to the seller. The difference in this for sale by owner system is that there’s a 4% cooperating broker’s compensation offered on the listing. Aren’t for sale by owners selling on their own so as not to pay commissions?

Another difference is that a seller can place a reserve on the property; auction talk for a set minimum price the seller is willing to take. In other words if no one meets the reserve the sale will not occur. But what if the home is over priced and the reserve is not realistic? What then?

I’m not sure what to make of this system or whether or not I think  it’s going to succeed here in the San Diego real estate market. I guess time will tell if this new way selling and buying real estate will work. I’ll keep you posted when I get some feedback on how their first sales goes.