Not that long ago, online real estate auctions were characterized by distressed properties bought mainly by investors. With the glut of foreclosures following the financial crisis, auctions brought buyers and sellers together on one platform and provided a quick and painless way to clear out distressed inventory. But what would happen when the flood of foreclosures stopped?
As it turns out, the online auction business model conceived in the middle of the foreclosure crisis is proving highly adaptable to a more normalized housing market.
And one company, Auction.com, is wielding the innovations it learned during that time to remake the landscape of real estate transactions for years to come.
Auction.com pioneered online real estate transactions when it conducted its first Internet auction in 2007. Today the company has sold more than $30 billion in residential and commercial properties and is perfectly positioned to meet the increasing consumer demand for online housing transactions.
“Our company has evolved from an old-school offline auction house to being a tech-driven enterprise, the eBay of real estate,” said Rick Sharga, executive vice president of Auction.com
“It’s a whole different approach to an old process, and it has the potential to bring a lot more efficiency and transparency to real estate transactions.”
That different approach includes partnering with Google Capital to maximize the company’s technology reach, bringing in executives with serious digital experience and applying lessons learned in the commercial space to a growing residential market.
Google Capital made a $50 million investment in Auction.com in March 2014, marking the first time the tech giant had invested in a real estate venture. The investment was a game-changer for Auction.com, not only with regard to capital, but also from a technology standpoint.
“Within our competitive environment, we have a pretty significant lead in terms of our technology deployment,”Sharga said. “Our partnership with Google has been very helpful to our product and engineering teams, which are tapping into Google’s expertise for mobile development and SEO optimization.
“They are also guiding us in the direction of best practices in a number of areas.”
Auction.com has used the investment to its advantage, rolling out mobile applications that put its digital presence onto every device a consumer wants to use.
Last year the company introduced an iPad native app that more than 100,000 people downloaded, and it was used to sell well more than eight figures’ worth of properties.
In January of this year, Auction.com launched what it thought would be a relatively minor app on the iPhone. Unlike the iPad app, the one on the iPhone only lets users bid on properties they have already registered for.
In the first 10 days, users bought 10 houses on the app.
“Consumers want to be able to use whatever app or device they want, wherever they are, whenever they want. When a buyer is willing to buy a multimillion-dollar property by clicking on an iPad, that tells you where the market is headed,” Sharga said.
The mobile apps are especially popular with purchasers on the road. Sharga related a story of one buyer who bought a house while watching his son’s soccer game — in India. Another bought a $2.5 million hotel on his iPad, possibly while driving his car.
“We don’t recommend that,” Sharga was quick to add. “But it illustrates how people are using technology today.”