IRVINE, CA-Technology and the online auction process are helping to streamline both commercial and residential real estate transactions, says Rick Sharga, Auction.com‘s newly appointed EVP. With a background in the foreclosure process at RealtyTrac and as a frequently quoted source on real estate, mortgage and foreclosure trends, Sharga tells GlobeSt.com where the foreclosure market stands now, how technology is changing the pace of real estate transactions and his goals for the Auction.com brand.
GlobeSt.com: Foreclosures seem to be moving in the right direction. What does this mean for the housing market in general, and how might it impact commercial real estate?
Rick Sharga: I think we’ve passed the peak of the foreclosure crisis, and all the numbers are trending in the right direction. We’ve seen delinquency rates on the last two years of loans actually outperform historic averages. That’s one of the metrics that suggests the housing market is in a full recovery right now, along with home prices and the volume of sales going up. We’ll see fewer homeowners who are in delinquency or in foreclosure, which reduces the number of discounted properties on the market and makes for a healthier sales ecosystem. We’ll continue to see prices go up and volume of sales increase as buyers come into the market.
What that means for the commercial real estate industry is an interesting question. You can’t directly link residential foreclosures with the commercial market, but we’re not seeing any indication that commercial foreclosures are going in the wrong direction either. Both the residential and commercial markets appear to be going in the right direction in terms of foreclosure activity.
GlobeSt.com: What are the main ways you see technology changing how real estate transactions are done?
Sharga: What the Internet has done so far is taken what had previously been proprietary or hidden data and exposed it to consumers interested in buying or selling a property. We’re seeing numbers of all home purchases starting on line now as high as 90%+. Historically, information about properties available for sale had been the purview of real estate professionals. You had MLS systems and publications that came out with listings, and the only way to find those was to work with an agent or look at newspaper ads. Now, anyone interested in purchasing a property can find out anything they want to about it online. Sites like Trulia and Zillow have helped brokers and agents market their properties. RealtyTrac is democratizing foreclosure data, which had been very much a hidden commodity.
The real estate purchase process is an incredibly inefficient, paper-intense, painful process. The Internet will make things more efficient by enabling transactions to be conducted online, and Auction.com is well positioned to be at the forefront of that change. Most homeowners will want to inspect a house, but there’s no reason they shouldn’t be able to finish the transaction online. For investors, there’s even less reason not to—they can do a detailed analysis of a property without having ever visited it.
GlobeSt.com: What are your goals in your new position at Auction.com?
Sharga: Primarily, my goals are to make the Auction.com brand name better known, particularly among mainstream audiences, to really position the company as an authoritative, reliable resource for real estate information so people feel they can trust the brand when it comes to buying or selling property. Whether the audience is commercial, luxury, distressed or residential, we want Auction.com to be the first company that comes to mind when buyers and sellers look at a real estate transaction.
GlobeSt.com: What is your impression of the auction process and how it impacts the commercial real estate industry?
Sharga: I think there’s an element of efficiency, whether it’s a ballroom auction, onsite auction or online auction. It gives potential investors the opportunity to bid on properties from anywhere in the world. Not surprisingly, we’re getting bidders from all over the world, which is very difficult to do in a traditional real estate sales environment. We generally see higher sales prices and shorter sales cycles using an online auction. What’s interesting for me, after looking at the process used in the commercial market successfully, is now it has the chance to extend into the residential market as well.