IRVINE, CA—Initially used as a method for marketing and selling distressed assets, online auctions are now used globally as a safe, effective and efficient method for getting deals done, according to
Superior marketing is one advantage, according to Dan Rama of NewGen Worldwide. With Auction.com's advertisements, the seller received 350 inquiries with signed confidentiality agreements. “It has to do with marketing ability,” says Rama.
Ash Patel of Southwest Hospitality Management, adds, “I saw the amount of marketing and the reach of Auction.com: hundreds of thousands of pieces gone within 45 days all over the world and on all the platforms where they were marketed.”
Mukesh Mowji of Pracrea Inc. was particularly impressed by Auction.com's reach. “It's mathematical theory: the more people know about your property, the higher your price is going to be,” he said.
In fact, its global reach is another advantage to working with the website, users say. JD Deva of Maya Hotels, says, “One of the things we liked about selling through Auction.com was that we had an opportunity to market nationwide. The eventual buyer was from out of state, and we got a good price from that buyer.”
Deva adds that the site's online model is what helps streamline the process. “Traditional sales negotiation is never-ending until the day of closing. You need to keep providing what the buyer is asking for in order to close the deal.”
Rama points out that once there is a clear “winner,” there is no more communication between the buyer and the seller, which prevents renegotiation. “All the information is given to you up front and you have the ability to see the physical product itself.”
Patel predicts, “[Auction.com is] evolving, and buyers around the world will adjust to what the future brings, which is transactions being done online in real time and fast. A lot of the due diligence being done is done beforehand, and what this does is bring serious buyers to the table.”
Clients admit they used to view online auctions as a means for selling strictly distressed assets—but no more. Ketan Patel of ROHM Hotels Group, says, “It took awhile to get used to on this end because, when we bought, it was more distressed assets, and we were buying notes that were distressed. We were wondering, 'Are we going to get the right value?' Now, after watching it for the last 12 months, we're seeing assets on there that are not distressed beginning to sell—and some for higher than I potentially thought they would go for.”
Rama adds, “It's a new way for real estate commercial transactions to happen.”
Patel and Rama say they've been pleased and impressed with the Auction.com team. “Zero hiccups; extremely clean; we're very, very happy with the staff at Auction.com, from the closing team to the escrow team to the brokerage team,” says Patel. “They're very professional, very fast and very efficient.”
Rama adds, “With any Internet-based business, where you don't have to walk into somebody's office, you don't know what happens in the back end. I've never been to Google's headquarters, but I'm sure it's not just two guys running Google, and I think Auction.com runs almost the same way. There are hundreds of people running the back side of this website and the whole real estate transaction. It's very helpful for brokers and sellers to know it's being handled by professionals and through the right legal channels.”
Users describe the site as broker-friendly. “One of the greatest assets of Auction.com is the sharing of information that they do with brokers,” says Rama. “It's very transparent. They're sharing that information with you and helping you establish and expand your own database.”
According to Hitesh Bhakta of West Coast Hotels Group, he asks himself, “What's the best network I can tap into? And from that perspective, Auction.com relies on folks they have relationships with who bring them this information, and I know they have these relationships or they wouldn't have these listings or opportunities for us to look at.”
Bhakta says the site offers him a better model for doing business. “From my perspective, when Auction.com came along for the first time, it offered us the opportunity to be involved in a different platform, but gave us essentially the same information we needed to make decisions on whether to purchase or sell one of our assets. In hindsight, I should have embraced it a little quicker.”
Bhakta adds that he likes the idea that he's finally getting a source of “good, solid data” that is allowing the decision-makers to look at the information at the same time and make the right decisions for their hotels. Rama says the due diligence on Auction.com is “deep and comprehensive” and that anyone from a sophisticated buyer to a novice has more than enough information to do their due diligence.
The site's accessibility is important to Patel. “It allows me to continue doing my analysis” even from a plane, he says, allowing him to download what he needs quickly, make an analysis and get quick email confirmation on it. “It allows me to do it quickly and more efficiently.”
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