The Ins & Outs of Building a Real Estate Auction Platform

Auctions are a great way for buyers and sellers to exchange goods at a fast pace and for reasonable prices. In the digital age, more and more live auctions are migrating to online platforms, making online real estate auctions the way to painlessly buy and sell properties. Let’s take a look at what it takes to build a real estate auction Apps.

What Kinds of Properties Do Auction Platforms Offer?

It is best to offer a range of property types, including:

Short-Sale Properties:

These are properties being sold typically by distressed homeowners who are looking to avoid property repossession or bankruptcy. Buildings that are sold as short-sale often sell for less than the outstanding mortgage on them. This sale type benefits both lender and borrower.

Foreclosed Properties:

This type of property has been seized by the lender in an attempt to recover the loan balance. A foreclosed property has gone through the pre-foreclosure process which involves the lender and the borrower working through potential solutions for paying off the outstanding debt either with a payment plan or the selling of the property. If nothing is worked out, a property can go into foreclosure.

Bank-Owned:

Following a failed foreclosure sale, banks will take properties into their ownership in order to re-sell them. These properties are listed at discounted prices and are often found right on the banks’ website.

Flipped:

These properties are investor-owned and have been bought to be fixed up and re-sold at a higher price. In most cases, flipped homes are remodelled and upgraded to be sold to first-time home buyers.

Retail Properties:

Properties that fit this category are non-distressed and include commercial buildings for individual stores, shopping centres, and service-type businesses. These are popular to those seeking to expand business portfolios or investments. New investors may choose this property type as a way to acquire a commercial property portfolio.

What Kind of User-Base Can You Expect for Purchases & Sales?

As with any real estate platform, you are going to bring together users who want to purchase and sell properties. The difference between those on an auction platform and those who make use of the traditional real estate eCommerce climate. Those on an auction platform are going to fit into one of the following categories.

Sellers:

These are individuals who are homeowners, real estate agents, investors and asset managers selling bank-owned properties for profit. Your online auction platform should only allow licensed real estate specialists to create property listings.

Buyers:

These are individuals who are looking to purchase inexpensive homes for personal use or serial real estate investors/agents hunting cheap properties to flip and sell or expand portfolios with.

Operators:

These are the individuals that operate the auction platform (you). Your responsibility is to handle transactions and provide consulting support on difficult listings.

What Features Drive Real Estate App Development?

Your auction platform should allow buyers and sellers to easily meet, conduct smooth transactions between one another, and boast the functions needed to buy and sell properties effectively.

User Accounts & Registration:

Users should be required to make profiles for identification and to ensure co-operation between buyers and sellers. Profiles should include personal information such as name, address, contact information and email for notification purposes. Additionally, sellers should include their title, company name and real estate license number and state. Buyers will need to provide payment information, so having a payment gateway would be ideal.

Property Listings:

The main way of filling up your auction platform with properties is through property listings, so functionality needs to be there for sellers. Your auction platform should include the following property listing features.

1. Adding a property for auction: Sellers need to be able to create a new property listing by adding the property to the platform. As the auction platform owner, you may choose to charge a non-refundable fee for listings.
2. Bid duration: This is the duration for how long a listing will accept bids. This time frame can include the pre-auction, staging, and post-bidding periods but can be shortened or lengthened depending on what the seller wants. The fee for this is almost always fixed.
3. Property listing edits: Sellers listing properties need to be able to modify or edit listings if information about the property changes.
4. Re-Offers on properties: If a bid is won “unfairly” then this feature allows the seller to re-offer/re-list it for another round of bidding.
5. Property Description: This is simply the description of the property which includes things like bedrooms, bathrooms, square footage, parking, and so on.
6. Photographs: High-quality images are absolutely critical for selling properties.
7. 3D tours: This feature gives sellers the ability to allow buyers to view properties in 3 dimensions which gives buyers a better understanding of the layout, interior design, and size of the property without having to physically visit the property location.
8. Starting & current bid: Also known as the opening bid, the starting bid is the lowest acceptable amount that can be placed. The current bid is the highest winning amount on an auction that is in progress.
9. Auction timer: This shows how much time is left until the auction ends or it shows the end date of the auction.

Search Functions:

Helping buyers find attractive properties more easily will help facilitate sales. Effective search functions only require three parts:

1. Filters: The ability to apply advanced filters will save buyers time, as it will allow them to narrow searches containing thousands of properties they don’t want, to dozens that they do. Allow filtering such as location, price and property type.
2. Sorting: Being able to sort properties in a search from least expensive to most expensive, by auction time remaining, or even by the date the auction was posted will further help buyers locate desirable properties.
3. Saved Searches: The ability to save properties for later viewing is essential, as having to search for the same property multiple times takes away from user experience.

Bidding:

The core of an auction platform is the ability to bid on what is being sold. Determine whether you want buyers to place a deposit before bidding or if you’d prefer to charge for listings and wins. Buyers should be able to bid 24/7 until the auction finishes, and the auction should clearly display the opening bid, vendor bids made by the auctioneer on behalf of the seller, the time remaining in the auction and the number of participating bidders. Additionally, you should implement an automated bidding process, as well as a “Buy Now” option.

Event Calendar:

Having an auction calendar or event calendar is extremely important as it shows buyers and sellers information on upcoming real estate auctions on the platform. It should include filters for auction location, asset type, event name and the start/end dates.

Bidder Dashboard:

A bidder dashboard is where all bidders are going to be able to see their activity on the platform. This is an extremely important feature if you’re trying to attract agents who work for investors as they tend to bid all day long and make multiple transactions. A bidder dashboard should include the following features:

1. Property notifications: Give your auction platform users the option to sign up for notification emails about new properties being listed. These notifications can include outbid notices, high bid confirmations, documentation, auction progress, and warnings about auction listing closures.
2. Lists of saved properties: If a bidder is interested in multiple properties, being able to save them to look at later in the form of a list is preferred.
3. Bid management: If a bidder can place a bet on chosen or favourited properties right from their dashboard, this is convenient and is user-friendly.
4. Reports and metrics: These are detailed reports/graphics that show metrics on all auctions a bidder is participating in.
5. Other detailed information: This includes things like current statistics on active auctions, activity history, and upcoming auctions that match a bidder’s interests/criteria.

How to Make Money With Your Real Estate Auction Platform

Auction platforms make their money from the fees for the service provided. You can generate revenue through buyer’s premiums which is a fee for handling the sale of the property and comes as 5-10% of the final purchase price. You can also generate revenue through transfer tax, which is a fee for transferring the title of the property to the auction winner. Finally, you can implement a technology fee for use of the platform which is added onto the purchase price of the house.

How to Attract More Buyers to Your Platform

1. Auction Financing: Offer financing through your auction platform so that buyers can pre-qualify for loans without leaving the website.
2. Bridge Loans: Create partnerships with national lending companies to provide bridge loans to buyers using your platform. A bridge loan will give buyers access to the funds they need to participate in auctions, while they sort out long-term funding on the side.

What Features Are Needed for Mobile Capability?

Regardless of the target market of your auction platform, it needs to be mobile-friendly. You will need the following features for a mobile auction app.

1. Push notifications for sending out information on listings, auctions, and new properties being saved.
2. Your users should be able to search by location, address, or region.
3. Users should be able to share properties via email, text, or social media.
4. Offer real-time bidding so that users can place bids and check in on bids.
5. Consider in-app messaging for communication purposes that allow users to talk about, share, and find homes without ever leaving the application.

Must-Have Security & Safety Features

In order for your auction platform to grow and gain the trust of those using it, it must have the appropriate security and safety features in place.

1. Make sure that all users who register provide identity verification. This helps you prevent fraud is it allows you to terminate any questionable registrations and all bidding activity.
2. Provide real-time tracking of all bids.
3. Allow users to leave ratings after auction purchases. This helps weed out unsavoury sellers from your platform.
4. Provide bidding agreements that all sellers must adhere too. If they violate these terms and conditions, their membership is automatically terminated.

With the amount of professional knowledge that must go into creating a top-notch auction platform, our team would be happy to assist you with the project. If you’d like to learn more about our services, please contact us.