The other day, I heard an investor talking about flipping houses in today’s market. “I don’t worry about getting stuck with properties,” he said, “because I can always just dump them on eBay.” While it is true that you can find anything and everything for sale on eBay – and, with some dedication, usually at a price that you can live with – the notion that you can simply “dump” a property on eBay if you cannot sell it in the local market is a bit misleading. The internet – and sites like eBay in particular – are great venues for fast and profitable real estate sales, but only if you understand the in’s and out’s of the process.
For starters, it is vitally important to remember that the legal aspects of a property transaction are just as serious when you sell online as when you sell in person. Many people do not realize that they are assuming all sorts of liabilities and responsibilities when they sell online. Make sure that you understand exactly what you are agreeing to when you post online – for example, eBay may have different rules than Craigslist – and remember that there have been several cases in which judges found comments in email correspondence to constitute promises and intent to sell, so watch what you write and how you write it when discussing a potential deal!
Secondly, remember that the same issues that a property next door has, a property across the country may have as well. Due diligence is vitally important when you buy and sell online. Make sure that you are aware of all liens and other claims against a property. If you are selling and the property has problems, be aggressively up-front about these issues. Otherwise, your sellers may accuse you of misleading them about needed repairs or accessibility.
Finally, evaluate your bidders’ options on the site that you select to do real estate business. eBay, for example, offers both “binding” and “non-binding” bidding auctions. Neither actually results in a legally binding contract to buy, but a binding auction that fails to end in a sale can net you negative feedback since you are expressing the intent to buy. However, a non-binding auction that does not result in a sale cannot negatively affect your eBay user profile. Additionally, many online sites allow you to advertise without selling a property, which can help you promote a property without the additional uncertainties involved in selling online.
As with any other real estate transaction, the value of the property will ultimately determine the success of the deal. eBay and other online real estate sites are not magic real estate “dump bins” that will find you a buyer for anything at any price. They will, however, dramatically widen your range of exposure and might help you find a buyer that you otherwise would never have met.
Do you promote properties on eBay or other online sales sites? Why or why not?
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