Not too long ago, CBH Homes in Meridian, Idaho, marketed several of its inventory homes by putting them up for bid on eBay, the online auction site. CBH dropped the price of these homes below the $95,000 to $200,000 range to which it had recently reduced its new-home prices and kept the auction active for 90 days.
“It was fun,” recalls Ronda Conger, the builder’s vice president. But CBH managed only to sell two homes—each, coincidentally, to 22-year-old first-time buyers. Conger observes that eBay’s real estate portal “isn’t quite there yet” as an avenue to market a big-ticket asset like home or land.
Still, eBay shouldn’t be dismissed by builders either as a source of competition or as a possible outlet for liquidating unsold inventory. As of this morning, there were 1,147 ads posted on eBay's real estate portal for land, 739 for homes, and 87 for manufactured homes. There were 52 new homes posted for bid, 477 existing homes, and 107 foreclosed homes. The greatest number of homes available, not surprisingly, is in Florida, where 115 of the ads posted are located, followed by Pennsylvania (79 homes), Ohio (59), Michigan (48), and New York (39).
Officials from eBay, which is based in San Jose, Calif., were unavailable for comment for this article, so it’s impossible to know how many builders have turned to the online auction site during the downturn or how bidding has been for new homes listed on eBay. And while eBay is a public company, it does not detail in its quarterly financial filings how much business it generates by product segment.
However, eBay did provide BUILDER with some information about its approach to real estate. According to an eBay statement emailed to BUILDER, winning bids for homes, unlike other products auctioned on the site, are not legally binding “because the real estate industry is so heavily regulated from state to state.” The statement went on to say that buyers must also go through the same offer and escrow process to purchase properties they discover on eBay as they would if they’d learned about the property through any other advertising channel, such as their local newspaper.
What’s different from a conventional classified ad, of course, is that the buyers have the opportunity to impact the selling price through the bidding process. For residential, commercial, and other real estate, eBay charges a listing fee of $100 for 1- through 10-day auction-style listings; $150 for a 30-day auction or a 30-day classified ad; and finally, $300 for a 90-day classified ad.
A random sampling of the ads on eBay’s site finds a wide range of products and prices, from standard 3-bedroom, 2-bath Colonials to something completely different.
In Frederickstown, Ohio, for example, an owner is offering a 12-year-old, 5,816-square-foot multifamily house with 10 bedrooms, 3-1/2 baths, two enclosed porches, and two sunrooms. The owner notes that the house in located in an unzoned township, so a buyer would have a lot of flexibility to make changes to the property, which also includes an uncapped oil well. “You get all of the mineral rights,” the ad touts.
In Marietta, Ga., 21 bidders had put in a total of 58 bids for a 1,408-square-foot foreclosed condominium, built in 1985, which the owner was selling in an “absolute 10-day auction.” When BUILDER looked at this ad there were four days and 37 minutes left in the auction and the highest current bid was $18,700.
In Toledo, Ohio, another owner was offering a foreclosed 3,237-square foot, 128-year-old Victorian, with five bedrooms and 2-and-a-half baths. That house had been purchased for more than $53,000 six months earlier, but the highest among 26 bids posted to that point had been $9,000.
Among the newly built homes being auctioned includes a 1,888-square-foot single-family house, with three bedrooms and two baths, in the Hollywood Park section of San Antonio.
This house, which has never been lived it, came online on Sept. 25 and is being sold by its owner, a local broker called Laura Jacaman Real Estate. The “advertised price” for this home is $249,900, and as of today there were no bidders. “We’ve posted a few houses on eBay, and have not received any significant offers,” says Jerry Sanchez, assistant to the broker’s owner. “This goes to the whole notion that everything will eventually be sold over the Internet. How true that is for really big ticket items like homes is hard to say right now.” He adds, though, that the company would probably keep the house on eBay through the end of this year.
Mike Casper, a semi-retired rare coin dealer in Ithaca, N.Y., tells BUILDER that all six of the inquiries he has received so far for the property he is auctioning via eBay had been from brokers, “most of which are in California.”
Casper, though, isn’t in any rush to sell what he’s posted on eBay, eight subdivisions within 115 acres that include a 3,000-square-foot home (for which he’s asked $4 million), and another parcel with a 2,250-square-foot home and a 1,500-square-foot barn residence on it, for which he wants more than $2 million. Casper has built a Buddhist temple on the property for his personal use and says he would consider offers from buyers interested in becoming partners in turning a part of this property into a bed and breakfast or a corporate retreat.
John Caulfield is senior editor at BUILDER magazine.