Online Auctions: Increasingly Seen as Viable Option for Any Builder or Developer

Online real estate auctions are losing their stigma as a last ditch effort by sellers who are either desperate to sell new inventory or are trying to sell distressed properties that very few people actually want. Increasingly, builders and developers who are financially sound are reconsidering their previous assumptions regarding auctions and are now viewing the online auction platform as an effective way to expedite sales.

Our two newest campaigns offer examples that may surprise people. Both builder closeouts of upscale new homes, the campaigns shatter all expectations that auctions are for the struggling or defeated.

The first auction is of remaining inventory in the Tuscan-style community of Brava in Palm Desert. The 16 luxury townhomes are set within a community built to uphold exceptional standards. ‘Toscana’ paved roads, stone detailing on the units’ exteriors, and amenities such as an fitness center, clubhouse, and two pools, are all evidence that Brava offers residents the country club lifestyle. Located in the heart of Palm Desert—at the prestigious intersection of Country Club and Monterey—Brava brings the class and old-world charm of Italy to the serene desert landscape.

Above: The exterior of a unit at Brava in Palm Desert

The second auction is of remaining homes spread over three communities in Denver, Colorado. Of the eight homes, four are upscale multilevel Brownstones located in the Westerly Creek neighborhood of the master-planned community of Stapleton; three are large estate homes in the Eastbridge community of Stapleton; and one is a ranch style custom home in the charming town of Golden. All the homes are over 3000 square feet, with views of the surrounding mountains and access to both the city center and the great Colorado outdoors. Built with amenities such as a private elevator and rooftop terrace (Denver Brownstones), a Jacuzzi spa and large yards (Urban Estates), and a large ranch lot with access to trails and hiking (Golden), these homes are the perfect match of luxury and functionality.

Above: One of the penthouse terraces at the Denver Brownstones

Above: The exterior of one of the Urban Estates for auction in Stapleton

In both cases, the developers—well known and highly regarded in their respective regions—chose LFC to auction the properties on our residential real estate website Freedom Realty Exchange, FRE.com, so that sales could occur quickly and efficiently, while still promising reasonable prices, even in the midst of difficult housing markets.

With minimum bids half of the suggested retail prices, these auctions give buyers the authority to push the prices as high as they are willing to go, giving a good indication of what the market value truly is. Sellers don’t have to drive prices lower until buyers bite but can instead watch prices organically rise to the natural level.

Builders, developers, and buyers are all looking beyond the taboo of “auctions” and realizing that online auctions offer a technology-driven, convenient and transparent means of buying and selling real estate that is unmatched by any other method. The accelerated marketing platform makes sense in bad times and good, a solution for sellers in every situation in the market.

The builder closeout auction of homes in Palm Desert launches at FRE.com/265R4 on December 17, while the builder closeout of homes in Denver, Colorado launches at FRE.com/284R4 on December 19.

Good News for Real Estate in 2009

HousingWire, Reuters, and The Wall Street Journal all have encouraging news for the future of real estate, even in the face of other grimmer reports.

Kelly Curran at HousingWire writes of the improving foreclosure market. She cites Alexis McGee, of Foreclosures.com, who says the decreasing numbers of foreclosures, however small,—from 84,534 in October to 84,291 in November—is evidence of a larger shift in the market. McGee has these hopeful words to say: “Recovery is underway. Affordable is back in the housing market. In 2009, housing will not only recover, but we’ll see buyers leap into this market in droves, depleting our housing oversupply, and actually put higher price pressures on the market.” Although Curran seems a tad skeptical of just how big of an improvement we’ll see, we can feel comforted that a foreclosure expert sees such positive change.

At Reuters, Jonathan Stempel cites Wells Fargo & Co Chief Executive John Stumpf as saying that the housing market may finally be coming to the very bottom, with the promise of a rebound. Let’s hope he is correct in that assessment.

And finally at The Wall Street Journal, James Hagerty writes of the shrinking housing inventory, good news for ensuring we are not overwhelmed by excess properties. Citing ZipRealty Inc.’s data, which covers single-family homes, condos, and town-homes, Hagerty writes that in 29 major metropolitan areas, listings have decreased. As Zip’s CEO Patrick Lashinsky sees it, sellers have become more discerning about whether they should sell now or not.

All of this spells promising news for the future of the real estate market, which is of course good news for the economy as a whole.

Is That a Ray of Hope I See?

As the year comes to an end, there appears to be a lot to look forward to in the new year of real estate. Builders and developers are contacting us, eager to move their inventory, recognizing that the future of a healthy market depends on finding buyers to fill their homes. Auctions, once a selling tool that, to many, connoted distress, are now openly recognized as a smart, successful means of accelerating sales.

Online auctions are an even better means for selling than live auctions, bypassing the limitations of traditional outcry events. Whereas an outcry auction takes place on one day, and in a crowded ballroom or convention center, online auctions take place in a virtual marketplace, allowing buyers time to deliberate and to bid, as well as the flexibility to move bids to other properties if the one originally desired moves out of their budget. Using the Internet as a convenient, far-reaching medium, LFC’s team of professionals has successfully marketed homes both nationally and internationally on the Freedom Realty Exchange website, producing impressive results even in the worst of times and freeing builders and developers to move on to future projects.

We have many campaigns in the works and anticipate many more as builders and developers hurry to free themselves of the burden of static inventory. Stay tuned for many more updates, as we move into 2009 with many new homes available for purchase!

Welcome to the LFC Group of Companies' blog, the newest source for real estate auction information!

Company Background

LFC Group of Companies is the nation’s premiere online real estate auction marketing firm. Located in Newport Beach, California, LFC has built a reputation as an industry trailblazer, building a long list of impressive clientele and billions of aggregated sales annually.

For over thirty years, LFC has been facilitating the buying and selling of real estate through auctions. Beginning in the early 1980s and continuing into the 1990s, LFC held successful live “outcry” auctions both nationally and internationally. With the advent of the Internet, it became clear that online auctions would be the way of the future, and LFC spearheaded this technological innovation with the launch of LFC.com in 1995, thereby ushering in a new era in real estate auctions. Utilizing the Internet’s global reach, LFC.com exposed commercial and industrial properties, including land, to a vastly wider audience than ever before, overcoming the limitations of traditional “outcry” auctions.

Extending the success of LFC.com, LFC Internet Marketing, Inc. established the Freedom Realty Exchange® website, FRE.com®, in 2005, to auction both large-volume residential inventories and individual properties, including bank-owned REOs. Once more, builders, developers, investors, and lenders, eager to sell property in an innovative, effective fashion, were connected with buyers equally eager to determine the value of properties for themselves and buy from the convenience of their own computers.

As a successful real estate auction company, with experience selling properties for companies like Coca-Cola Enterprises, Adelphia Communications Corporation, and the St. Joe Company, as well as prominent residential developers nationwide, LFC has used its real estate auction expertise to create online marketplaces that benefit buyers and sellers alike.

Visit us at http://www.lfc.com/ and http://www.fre.com/!