EBay for Real Estate?

EBay for Real Estate?

An auction sign in front of a home in Salem, Ore.

The auction block is typically associated with prize-winning cattle, antiques, and maybe Uncle Henry's stamp collection.

But in a tough housing market, an increasing number of homeowners are turning to the centuries-old method for a quick sale.

"It speaks to the fact that there's pent up demand to be able to take control of your life and move on," says Pam McKissick, CEO of auction firm Williams, Williams McKissick. After launching Williams Williams' online seller portal several months ago, McKissick estimates the firm received more than 1000 calls from all over the United States and nearly 30 countries.

"People are starting to get hip to the idea that 'I can skip the middleman' and sell their property in 30 days," she adds. "Auction is nearing the tipping point."

But "cutting out the middleman" doesn't mean sellers are on their own. The firm offers a range of services with varying levels of involvement that center around determining how much the property is worth, marketing and advertising the property, and assembling a pool of interested buyers. Clients can choose programs that have more hand holding, McKissick says, or they can take a more DIY approach. Either way, sellers aren't left high and dry and remain in contact with their firm representative throughout the process.

And it's not just foreclosures or distressed homeowners looking to auction as a way to get properties off their hands. In fact, it's quite the opposite. While banks do use auction to sell off repossessed real estate, average sellers must have equity in their homes or own the property outright.

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"The people we're talking to aren't in that condition," McKissick says. "They just want to move on with their lives and want a 30-day sale they know is going to close."

With the nationwide median days on market hovering around 84 days according to Realtor.com, a quick 30-day timeline is one benefit of auction but it's not the only one. Another is finding an accurate market price, something that has become rather difficult in the wake of the foreclosure crisis and declining home prices nationwide.

According to Zillow, more than 30 percent of properties nationwide had their price reduced in the last 30 days, which is sometimes an indicator that a seller priced the home too high to begin with.

"In today's market discovering price is very difficult because comps aren't as available," says Chris Longly, spokesman for the National Auctioneers Association. "By putting [the property] out for competitive bid at an auction you allow the buyer in the marketplace to set the price."

More often than not sellers get a better price, too. McKissick estimates the highest bid increases as much as 11 percent thanks to the firm's unique strategy of mixing so-called "on-the-lawn" bidders with online ones.

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Price discovery can also be tricky when it comes to distinctive properties that have elements that an appraiser can't really put a price on, such as celebrity homes. Longly recalls when singer Cher was selling her Hawaii home.

"Cher owned it and what's the value of that?" he says. "Auction tells you what it is."

But buying a home at auction isn't for the faint of heart. Along with the benefits of auctions, there are some aspects that could be seen as drawbacks. For starters, properties sell "as is," which means there's no counter offers or negotiating price breaks for needed repairs.

"You need to adjust your bid accordingly," Longly says.

Even so, Longly still thinks auction is the best way to put a little fire under window-shopping would-be buyers.

"We're forcing buyers to be decisive," he says. "That's one of the true beauties of auction."

Meg Handley is a business reporter for U.S. News World Report. You can reach her at mhandley@usnews.com and follow her on Twitter.