Friday, October 07, 2005

Can e-bay sell your property?

The pros and cons of using ebay:

Question. Does selling real estate on ebay really work?

The simple answer from my observations is no. Most people I spoke with were suprised of how few people actually use www.ebay.com for their Boston real estate needs. But when you research into ebay you will find out that there is a reason for its poor performance.

Lets's get down to bidness (er, business) with the ebay auction format.

The main problem is that ebay's business plan fails to meet the legal Masachusetts requirements of a legal contract as it pertains to purchasing or selling real estate. Other items sold in an auction format on ebay are legal & binding. Real Estate is an exception to the rule, and thus is an unenforceable contract (void) by both parties in the bidding. You can post property ads on ebay for viewing but any bids on such property is uneforceable for it fails to meet state requirements for the transfer of title and deed.

So until a new business model is developed in the buying and selling of realty it appears that the tried and true basics of the real estate business are back in vogue. I believe that the old fashion principles will be around for a while, even in this internet enabled world. And what are the basics :

- For Sale signs and newspaper ads.
- Open Houses.
- Referals from friends and co-workers.
- Direct mass mailings of the listed property.

I do believe it will be hard for www.ebay to break into the local real estate market with the existing business model. Don't get me wrong, ebay has many great features especially for taking inefficiencies out of the marketplace. For example, I love to collect baseball cards and if I wanted a Babe Ruth 1915 Red Sox card to purchase it would be hard for me to go to a local store and find one. But ebay can fill that void because rare baseball cards are still, even today, an inefficient marketplace where on the other hand real estate isn't. Most real estate web sites www.fordrealty.net and others have enormous amount of property listings, with no sign-in requirements that request personal data from you. In addition, these web sites provide free information on the home buying process for both the first-time home buyers and investors alike. So as you can see, the Boston real estate market is efficient and henceforth, why so few people go to www.ebay.com for their housing needs. Plus, the Boston realtors are local, where ebay is a global, which ensures that the local brokers will target your market more efficiently in the buying or selling of your home. Also, have you ever tried to reach someone on the phone from ebay?

Are there any positives in using ebay? Yes, generally speaking it is an inexpensive venue to advertise your property which has an enormous viewing audience. My advertisement cost are only $150.00 per month, per listing. Although, I have yet to receive a call stating "I saw your property on www.ebay.com and I would like to put in an offer" makes it very disheartening. As one of my agents stated: "John, did you really think someone is going to pull out their Visa card and say Oh yes! I will buy that Beacon Hill condo, my Visa card number is.........." Ok, maybe it is hopeful thinking on my part. But who knows what the future will hold. I am observing more and more viewers coming to my ebay site in the last three months more than ever before (ebay provides me with a free web counter for my listings so I can view it on a daily basis). Presently, I have received as few as 2 to a high of 40 unique visitors per day, per listing. Not a bad ROI (return on investment) according to marketing experts.

Another feature that I like about ebay is that with every posting it provides a commnity profile feature link of the neighborhood your listing is in. This added feature includes informational stats on the median age, number of college grads, number of married and singles living in the area and much more. All inclusive in the $150.00 posting.

I feel that ebay is still in the infant stages and still may be a major contender in the local market. However, It will require ebay to make some major adjustments in their business model as it pertains to real estate. With that said, the next generation of home buyers may change how we acquire real estate in the future. I remember back in the year 2000 when I first used craigslist.org for apartment rentals. At the time, I was only one of handful of brokers using it. Today, www.craigslist.org is not only successful, but it is second only to the Boston Globe for Boston apartment rental listings, so ebay may still be a player in our local market. But it will take a major shift on how people view how real estate is bought and sold. Presently, there is no signs that this will be happening in the next year or two but it may be in play in five to ten years from now. Old habits are hard to change, and I believe that there will also be some resistence from Boston realtors to prevent this paradigm shift to occur.

When this blog was printed I was the only person in the city of Boston, Cambridge or Brookline Ma.(to name just a few) that was using ebay to advertise properties for sale. But mark my words, this will all change in the future, the only question is how long will it take.

The views stated are mine and not those of the staff of Ford Realty Inc.

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