A new online auction site claims it will be the first to facilitate legally binding sales, by authenticating users and allowing the use of electronic signatures and documents so contracts can be executed digitally.
Bethesda, Md.-based bidEup will accept only those properties listed by licensed real estate agents or owned by financial institutions or government agencies, and requires bidders to show they have cash or financing from a lender.
In announcing the site’s launch today, the company said SunTrust Mortgage will be the first in a series of preferred lenders, although bidders with financing from any reputable lender will be eligible to use the site.
The chief executive officer of bidEup, real estate attorney David McNairy, is pitching the site as a way to increase a listing’s geographic reach, allowing sellers to market properties to potential buyers anywhere in the world.
Although any bidder who proves he or she has sufficient cash or financing may purchase property through the site, the site does not accept for-sale-by-owner listings from private individuals.
The company informs prospective sellers on its Web site that bidEup "strongly believes Realtors provide essential services to sellers in connection with real estate transactions of all types and sizes, including auctions. Consequently, you will have to establish a relationship with an agent before using this site to sell your property."
Realtors announce upcoming sales or auctions on their local multiple listing service and local publications, which "significantly deepens" the buyer pool, sellers are told on the bidEup Web site.
Realtors earn whatever sales commission is agreed to in the listing agreement, with a $125 online marketing fee the only required seller charge from bidEup. Sellers can purchase marketing upgrades including signage, text messaging packets and virtual tours.
The window for purchasing a property is open for 14 to 21 days, giving buyers an opportunity to conduct inspections and review terms of the standardized sales contract. All bids are accompanied by an electronic signature, and the winning bidder pays bidEup a fee equal to 1 percent of the sales price for use of the site.
Sellers are permitted to establish a reserve price, and bidEup says under some circumstances it will also take an auction down at the seller’s request, but will still collect a 1 percent discount fee from the eventual buyer.
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