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REAL ESTATE: WHAT AM I BID? Alabama Firm Promotes Online Auctions for Selling Real Estate

Posted by kinchendavid on December 30, 2006

By David M. Kinchen
Editor, Huntington News Network

Mike Keracher, left and Tony Isbell of RealtyBid.com

With the bursting of the real estate price bubble in most of the country, you’d expect to find a firm that markets real estate through online auctions to be suffering.

You’d be wrong in the case of Gadsden, Alabama-area-based RealtyBid.com. This is a firm that was part of the dotcom revolution of the late 1990s and early 2000s that not only survived the boom and bust of dotcoms, but has thrived, according to CEO Tony Isbell. “The firm was founded in 1999 as a traditional auction company,” Isbell told HNN in a telephone interview. “The online business — RealtyBid.com — was created in 2001, inspired, Isbell said, by the success of eBay’s online auction model.

“We have been exclusively selling properties online since 2001,” he added.

Anniston, AL-native Isbell, who founded the firm with another veteran of real estate auctions, Mike Keracher, from the Birmingham suburb of Hoover, said that bad times for real estate are often good times for real estate auction concerns – especially RealtyBid.com.

The comparison with eBay is only superficial, he told HNN.

“We don’t accept listings from individuals and we don’t have real estate ads, like eBay,” Isbell said. ““We assist real estate agents throughout the nation for homes for sale and we handle foreclosed properties for the top lenders in the nation.”

Foreclosed properties are not identified separately now, but will be in the very “near” future as foreclosures continue to rise, Isbell added.

Isbell and Keracher each have about 20 years experience in real estate auctions, and Keracher, the firm’s executive vice president, is a licensed auctioneer.

Since its founding, RealtyBid.com, with 16 employees, has sold more than 5,000 properties – valued at more than $250 million – in all 50 states, according to the Rainbow City, AL-based firm’s marketing director Daphne Shannon.

Shannon told HNN that, “according to the National Auctioneers Association (NAA residential property auction sales grew 39.2 percent or $4 billion from 2002 to 2005 (from $10.2 billion to $14.2 billion annually).”

“It’s important to note that this phenomenal growth came during a time when the real estate market was extremely healthy, during a time that conventional wisdom would say that real estate auctions shouldn’t have be ‘necessary,’ yet the growth speaks for itself,” she added. “And, with the real estate market now downshifting, we certainly expect that the acceptance and use of real estate auctions, especially online auctions, is only going to continue to grow.”

Shannon: “Also, the NAA recently announced that residential real estate auctions were up 4.5% in the third quarter 2006 over the same time period in 2005. This is an impressive statistic that shows how residential real estate auctions are becoming more integrated into the mainstream of the real estate industry; however, during the same third quarter when the NAA reported an increase of 4.5 percent in residential real estate auctions overall, RealtyBid.com experienced a more than 84 percent increase in online real estate auction sales over the same period in 2005. In other words, the residential real estate auction industry is growing, and RealtyBid.com and online real estate auctions are leading the charge.”

This past July, when national home sales dropped for the eighth time in the last 10 months, RealtyBid.com had a record-breaking 1,000 residential properties nationwide up for bid on its web site, five times the same month in 2005, Isbell added.

Business writers, including one from The Birmingham (AL) News, have taken note of the “Stars Fell On Alabama” state’s homegrown success story, with News writer Roy L. Williams quoting Isbell: “The sheer volume of properties offered each month around the nation keeps the company in the spotlight among agents and investors nationwide…”. Williams went on to say that the firm’s sales volume “ranks it among the top five largest real estate auctioneers in the country.”

RealtyBid.com has garnered publicity in publications as varied as the Los Angeles Times, the (San Jose, CA) Mercury News, The Philadelphia Inquirer, New York’s Newsday, The Wall Street Journal, the Miami Herald, CNNmoney.com, MSNBC.com, Inmannews.com, in addition to the home state The Birmingham News.

Isbell noted that because of RealtyBid.com’s relationship building with real estate brokers, technological savvy real estate agents find it easy to work with the firm. And tech-savvy agents are where it’s at in today’s high-tech, online, wired world.

“RealtyBid.com is an accelerated sales tool for the real estate agent, providing greater coverage for listings – something that real estate brokers need in today’s real estate market,” Isbell told HNN, noting that the firm receives its revenue in the form of a 1 percent Buyer’s Premium based on the selling price of the property, paid by the buyer at closing. “The commission the broker receives comes from the seller, so we’re complementing the agent, not competing with him or her,” Isbell stressed. “We are one of the only online real estate models that is helping the agent and not getting into their pocket.”

He added that very few bidders close the deal without either seeing the property personally or having another person inspect it for them and report back to make sure the property is as advertised.

Isbell: “For the consumer, we are offering great opportunities to purchase homes, condominiums and land and good discounts over retail pricing. All properties offered on RealtyBid.com requires that it be offered with a discounted ‘reserve’ price.”

Isbell is upbeat about the future of online auctions, especially his firm, telling HNN that “We expect to triple our business volume in the next two years.”

As foreclosures “skyrocket” throughout the country, he said he expects more business from that segment of the market. In addition, real estate brokers want to move properties faster, to get their commissions sooner, so that segment will also grow rapidly, Isbell added.

Selling real estate by auction is nothing new to North American rural dwellers and is the preferred way to market real estate in Australia, where 70 percent of houses sold are sold by real estate auctioneers, he added.

So far this year, the top states by volume of properties listed and bid upon are, in order: Michigan, Texas and Georgia, Isbell told HNN. “We also expect to see more properties in places like California, Nevada and Illinois.” Web site: http://www.realtybid.com

* * *

David M. Kinchen began covering real estate in 1970 at The Milwaukee Sentinel and was a real estate reporter at the Los Angeles Times from 1976 to 1990. He has been a member of the National Association of Real Estate Editors since 1971 and was president of NAREE in 1984.

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