IOAS: Real Estate panel discusses the potential issue of self-loaders.
Should online-only, real estate auction professionals be
fearful of self-loading sellers? Sustained or perhaps increased agent commissions,
the prospect of a buyer’s premium cutting into final profits and improved
user-friendly platforms have all created an environment for sellers to feel
comfortable with the idea of trying to sell their homes, via the auction method,
but doing it largely without the guidance of professionals.
It has been a slow process, one that took as much as a
decade longer than some auction industry experts originally prognosticated, but
it is finally legitimately on the radar. Quickly growing in their
technological, toolusing savvy, sellers have slowly begun to realize there may soon
be ways to mass self-pitch their plots.
At the recent Internet Only Auction Summit: Real Estate, in
Atlanta, Ga., a panel of experts convened and openly discussed the idea of
where this late but potential reality may lead.
With IOAS: Real Estate committee chairperson Will McLemore,
CAI, also serving as moderator, he, J.J. Dower, CAI, AARE, ATS; Manson Slik,
CAI, AARE, CES; and Rick Levin, all spoke on the current position of
self-loaders within the “Implications — Human Resources and Business
Structuring” session, and no words were minced.
“This is the touchiest, I believe, of all topics that will
be talked about in these two days,” Levin said, referencing that while he was a
realtor, he’s also a consumer. “Most consumers in the United States don’t
really love transaction fees.”
“I think if you have a legitimate fear in our industry,
selfloading should be part of that fear,” Dower said, before explaining why
Dower pointed out several IOAS: Real Estate attendees as being
from Tennessee, like him, saying that “I’ve never been worried about them being
my competition,” because he felt the marketplace’s integrity and
professionalism was not compromised as long as auction professionals were
handling the workload.
“My problem has always been a trustee, a sheriff, a lawyer, is
doing some kind of sale on a courthouse step or at some venue and calling it an
auction sale, and Auctioneers aren’t getting that deal,” Dower said.
“Self-loading can be the biggest downside to our industry of all time, when
real estate agents can automatically become online Auctioneers by taking 150
listings and saying ‘okay.’
“Not only have they taken our product, but when they only get
five of them sold, what’s going to happen when we go out to our next client
about doing an online only real estate auction, and they say, “Oh no, we’ve
been looking at those, and they don’t sell any of those.’
“If you have a fear, it’s not the guy down the street from
you that you think is your competition. It’s all the outside people because of
the access to platforms and everything else I worry about being in the auction
“It’s not the guy who is already in our industry and part of
our Association that keeps me up at night.”
Levin took a different view, wondering aloud if educating the
public and providing that user-friendly platform for self-loaders could in fact
be something for auction professionals to leverage.
“If you could do what we’re doing here [at IOAS: Real Estate],
but do it on a grand scale, if you could educate the public and educate consumers
through your website as to maybe how they go about conducting their own real
estate auction,” Levin surmised, “ … and, you let the seller upload their own
auction and ‘conduct’ their own auction on your venue, on your platform, on
your ‘Switzerland’ auction site, and perhaps have a lower transaction fee, such
that the consumer value proposition is so attractive that it blows the brains
out of anyone trying to compete with you …
“You will be like Time Magazine’s Man of the Year or Woman
of the Year if anybody could execute that. Right now, nobody on the planet has
pulled that off. That would be one heck of an accomplishment.”
The current fee structure regarding real estate transactions
is the crack in the dam for Slik. Mend that, he said, and the entire
self-loader conversation changes.
“I think as long as the real estate commissions stay at the level
four, five or six percent, as long as real estate auction commissions stay at a
level of six to 10 percent buyer’s premium — and that’s in the minds of the
marketplace — then, I think self-load is a much greater fear than if another mechanism
existed,” Slik said.
After offering extensive analysis and figures affecting his local
market in Ontario, Slik critically reviewed the system (which, he said, waits
for a property to receive an offer before it is given a full attempt at
selling) and called it a “fairly successfully inefficient” model of real estate
that he didn’t “think the marketplace is going to continue to accept.”
Changing that piece is the crux to the self-load issue.
“I think if we can figure out that piece and move into a commissions
base that’s different, I don’t think you’re going to see self-load,” Slik said.
“I think if we continue to be where we’re at, at the commissions levels we’re
at and offering the level of services we’re at, then I think self-load is a
National Auctioneers Association