Whenever a distressed home is ‘acquired’ by an institution through foreclosure, that institution is taking on significant financial risk including loss associated with a home value that is below the loan amount, selling costs, and associated holding costs (eviction, maintenance, rehabilitation repairs, property taxes, HOA insurance, etc.). Because of this, time is truly of the essence when it comes to managing disposition.
In the best of circumstances, disposition is a challenging business process. When you add in the complexity of unforeseen events, like this year’s hurricanes in the Southeast and wildfires in the West, it only underscores the importance of having the right infrastructure in place to support maximum efficiency when it comes to the successful marketing and selling of foreclosed properties.
Particularly in areas where municipalities have taken actions they feel will provide stability for their communities, such as putting moratoriums on the sale of foreclosure properties, there exist serious challenges for buyers and sellers alike.
So what exactly are some the characteristics of an infrastructure that supports optimal levels of efficiency?
“Boots on the ground” make the difference
The impact of technology on the disposition process is profound, but the reality is that there is simply no substitute for “boots on the ground.” Auction.com understands this clearly and has assembled a dedicated nationwide team of specially trained, local field experts that provide property and market intelligence at a hyper-local level. Whether an auction is being managed through our online marketplace or called on-site, our buyers and sellers require access to actionable information and that is best generated by field staff that are geo-located within those very communities.
Particularly after a severe weather event or natural disaster that may have triggered a moratorium, it is vital that both buyers and sellers be able to verify any change in the condition of the property as quickly as possible and having the resource of a local team already in place accelerates that process.
Dedicated client management teams for sellers
For sellers, the mission is to profitably sell the asset at the best price and as quickly as possible. This begins with a deep understanding of the property type, condition and characteristics that buyers are most interested in. Auction.com’s dedicated client management team guides sellers through the process of understanding exactly what potential buyers are looking for, how much they are willing to pay in the price realization process, and how long properties typically stay on the market within a specific community. Armed with this knowledge, sellers are better equipped to manage their disposition portfolios as efficiently as possible.
When and if an issue arises that causes a delay in auctioning a property (like a weather event or a moratorium), Auction.com’s team helps sellers navigate those circumstances and works with the local field teams when necessary to ensure the property is ready to go to auction as quickly as possible once the moratorium expires.
Dedicated customer care teams for buyers
The best buyer is an informed buyer. Whether experienced buyers who have been in the market for years or new investors, buyers find value in information, be it specific to the property, the neighborhood, or in some cases (like a “buy-and-rent” scenario), the tenants of the property themselves. Buyers tend to gain efficiencies by better understanding the auction process itself and Auction.com’s dedicated customer care team is in place to directly address buyers’ questions and concerns as they arise.
If, for example, a buyer is involved in an auction that is put on hold due to a moratorium or other circumstances, that buyer wants to know that he or she will be kept up to date regarding the status of the property during the process and won’t lose out on an opportunity to bid and win once the property is again available. This level of communication is essential in building buyers’ confidence and ensuring the health of the marketplace itself.
Greater efficiency equals greater profitability
Auction.com has focused our attention on leveraging the latest technology paired with talented human capital to significantly compress disposition timelines and achieve desired execution results by providing our sellers with greater access to the industry’s largest audience of investors. In doing so, we have created a system that is capable of selling a property in a single day (vs. months through traditional methods).
By truly understanding the nuances of the market, the Auction.com platform creates efficiencies for buyers and sellers by enabling better communication between these parties and providing the technology to streamline the sales process.
By converting vacant or foreclosed properties into owned properties more quickly, banks can more effectively mitigate operational and reputational risks. The focus on developing the right infrastructure has positioned Auction.com’s real estate disposition platform as a much more efficient method of loss mitigation for sellers, a better investment opportunity for buyers, and a stabilization partner for the communities in which the bank is financing homes.