Holes in the online real estate sector
After completing nearly 300 online real estate purchases through eBay, Bay Area bulk REO specialist Stephan Piscano became frustrated with the online auction process like many others buying online. Through his first hand experience online, Piscano saw the holes in the system and sought out to build a solution that not only disrupted the online auction sector, but improves the very practice.
With only a splash page, a few thousand people have already signed up for Piscano’s RealBay.com which is on the verge of launching in private beta before being made public, and at launch, RealBay has 2,800 assets on the site. Piscano tells AGBeat that they will be partnering with Trulia.com to send out an email blast to their users which should boost RealBay traffic at launch, making it more valuable to participants.
RealBay is not only an online real estate marketplace, it is also an industry social network. The site has live bid auctions and fixed price property offerings and unlike competitors, RealBay is free to users, allowing real estate professionals to market themselves and their listings at no cost.
More value added, all completely free
Piscano explained that RealBay’s competitors (Auction.com, Bid4Assets.com, RealtyBid.com, etc.) typically make it complicated (or impossible) for users to communicate as a means of maintaining control, as they charge a few hundred dollars as an insertion fee and a backend buyer’s premium of two to ten percent. RealBay wanted to open that up and allow parties to directly communicate, especially given the speed of the online buying process which can be slowed down by the traditional model of calling a buyer’s agent who waits for a listing agent’s return call.
How is RealBay free? The company will soon launch targeted advertising, allowing related service providers to purchase zip codes, cities or regions. As a bulk investor, Piscano attests to the fact that the first step after investing is to seek post-purchase recommendations on local service providers, especially given that a large volume of purchases are made by non-locals, sight unseen. After winning a bid, a purchaser is emailed a list of RealBay approved service providers.
Traditional auction sites charge large fees and don’t typically offer service provider recommendations that go along with real estate purchases, while RealBay is free and offers more. Currently, Piscano has direct oversight of the approved providers, but in the long term, the company is committed to verification (licensing, etc.), but we suspect most providers will be national or regional.
Problem with traditional sites: lack of security
Besides high fees and a lack of service providers, RealBay saw a hole in the system with verification steps, citing a recent incident wherein an older couple in Idaho purchased a handful of properties online through a quick claim deed (which Piscano says anyone can sign), only to learn later that the person that sold the homes to them through an online auction site did not own the deed, and the couple therefore didn’t own the properties and the seller was long gone.
In response, RealBay offers more verification steps, including the ability to upload verification documents for buyers to review when they are considering bidding.
Another way they seek to curb fraud is by charging the fraudulent seller’s card an additional $250 for their infraction (half goes to the property purchaser), as opposed to systems like eBay wherein a seller can have three infractions before they are banned from the site.
A future of disruption for RealBay
The company tells AGBeat that they will eventually pull in MLS listings through Point2 for research purposes, making the site a “one-stop shop” for real estate investors, so in one part of the site, they can review standard MLS listings and in another can search user generated content and properties for live bidding.
RealBay will soon be launching to he public and has already forged strong industry partnerships, seeking to provide more to investors for free than competitors do for a hefty price. Look for this company to be a disrupter and make waves in the industry.
Sneak peek screen shots of RealBay:
Exclusive to AGBeat, RealBay has shared some sneak peek screen shots of their product which will soon be in beta (which means it might have some bugs and it will get better over time). Click any image to enlarge: