Editorial|&utm_term=|Website-Editorial-NAT(Website)|"> Auction.com's EVP Rick Sharga tells GlobeSt.com. In order to dispel some of the biggest myths about online real estate auctions, we spoke exclusively with Sharga about those myths and why they're untrue.

GlobeSt.com: Many people feel auctions are the avenue of last resort and are only for distressed properties. What do you say to this?

Sharga: This may have been the case years ago when auctions were the easiest way to dispose of troubled assets, but the industry has evolved. Just like any other high-end item, auctions work for opportunistic and stabilized properties in the best markets. All types of assets work well for online auctions today, and many actually fetch higher sales prices than what they would have generated through a more traditional marketing process. Today, Auction.com is having success in the class-A market, which is realizing that using auctions as a first resort can be very effective.

GlobeSt.com: Auctions can have a reputation of transacting “sight unseen.” Is this true?

Sharga: Knowing that not many buyers would get involved with big-dollar investments such as real estate without doing their homework, Auction.com offers the same documentation and managed site visits as any traditional broker-driven transaction. Physical inspections, along with other due-diligence documents, are stored in the company's fully secure, online data vault, which is accessible to all bidders.

GlobeSt.com: What about hidden fees and non-refundable deposits?

Sharga: Nothing is hidden on Auction.com—everything is very transparent. It's very rare for there to be any kind of charge for bidding. While we do ask for a good-faith deposit, that amount is immediately refundable if the participant does not win the auction. We feel these deposits are for the benefit of all buyers and sellers. The deposits help legitimize the bidder pool, giving both buyers and sellers the assurance that all bidders on an asset are serious and that the competition between them is real.

GlobeSt.com: Do some buyers fear that auctions are rigged or that they're bidding against the house?

Sharga: It's easy to understand people's fears, but this really amounts to a simple lack of understanding of how auctions work. Auction companies often support bidding to help ensure the price hits the reserve figure—the minimum price the seller will accept. This is because an asset cannot trade hands unless a bid meets the reserve price. It's important to note that Auction.com never places a bid that causes an asset to hit or exceed the reserve. At that point, the bidding is all in the bidder's hands.

GlobeSt.com: Do you need to be tech savvy to bid in an online auction?

Sharga: Auction.com has worked hard to simplify and streamline the online auction process to make it something anyone can do from anywhere. All you need is a computer with Internet access and the ability to click a mouse. Or you can use our iPad and iPhone apps. We have experts on hand to guide participants through the process, if needed, and even address any of the rare technical issues that may spring up. This is what we do, and it's in our best interest to make the online auction platform universally accessible and easy to use.

Instant Insights /

Busting Five Myths of Real Estate Auctions

Related Stories

Recommended For You