Online Auctions Court Buyers, Sellers

Rbuy.com enters field so far dominated by Homebid.com.

August 1, 1999

In July, with the sale of 32 Las Vegas homes at its auction Web site, Homebid.com demonstrated the potential for selling property online. Many of the homes were sold during the “e-offer” phase, prior to the actual auction. Homebid.com also auctioned homes in Phoenix and Connecticut earlier this year.

But now the online auction concept has another proponent in Denver-based Rbuy.com. "This is the next evolutionary step after the MLS," predicts Charles Huggins, the founder and president and former real estate broker. Huggins cites the success of Ebay.com as proof of consumer enthusiasm for online auctions. In real estate the concept provides "the buyer an assurance of getting the best price because all interested parties can be in on the bidding."

Unlike Homebid.com, Rbuy.com prides itself as being the first online auction site controlled by salespeople. Also, Rbuy.com is exclusively an auction site, whereas a property may be sold at Homebid.com prior to auction if the seller agrees to a preauction offer.

Every aspect of the auction is controlled by the properties' listing salespeople, working with sellers. Salespeople pay $100 to affiliate with Rbuy.com, and a $100 listing fee. Any buyer, qualified by a salesperson, can submit bids during the auction period.

To date, Rbuy.com has completed seven auctions, and 15 salespeople have paid the $100 fee that allows them to post listings there.

"The auction process eliminates traditional negotiations," according to Huggins. Although the salespeople's commission isn't affected, "it changes their role from a salesperson to more of an adviser with specialized marketing skills."

Huggins says a successful sale depends on conveying to qualified buyers the advantages of buying by auction.

That could prove the most formidable challenge. An informal survey of visitors to CNN’s Web site in June found that only 10 percent of more than 42,000 respondents were willing to purchase property over the Internet.

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