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As Online Auctions Grow, eBay Enters the New Home Arena
eBay and Builder Homesite Inc. have partnered to offer builders listing and transaction capabilities on eBay’s Web site.
EBay and Builder Homesite Inc. have partnered to offer builders listing and transaction capabilities on eBay’s Web site. eBay’s new home channel will begin operating in the second quarter this year.
“eBay has really conditioned millions of people worldwide to prefer the open-auction model as a transaction model, and the question is how should home builders take advantage of it,” says Tim Costello, chairman and CEO of Builder Homesite.
Costello and Doug Galen, vice president of eBay Real Estate, point to numerous ad-vantages of using eBay’s on-line capabilities. Costello says that in grand openings, closeouts and “midlife development,” builders can decrease selling time while increasing the number of homes sold, all at higher prices, with more profit going to the bottom line. Galen points out builders’ broadened exposure, reduced marketing costs and increased inventory turns.
“Selling a house online is a bit of misnomer,” Costello says. “We fully expect people will go online, see the property, but also visit the property. But in their own privacy they can put their bids in — they can monitor the bidding and don’t have to be embarrassed submitting a low sales price to a salesperson because it’s totally impersonal. Auction is a preferred style, and if we can get builders to understand that some people prefer that transparency and ano-nymity, we can convert them.”
The channel is open to builders of any size, and eBay and BHI will assist builders in data collection and evaluation. Based on a “pay-for-performance” model, build-ers will not be charged for data listings or transactions unless they result in a concrete lead or actual home sale through the channel. In addition, the enterprise is offering reduced-fee incentives for “early adopters” and BHI members.
What will builders need to make the move to eBay? Two things, Costello says: one, a complete, thorough collection of their collateral information, including photos, graphics and/or virtual tours of homes and information about the surrounding community. Second, and most important, builders have to follow through on Internet leads, something Costello says has been problematic in the industry, with conversion rates anywhere from 0% to 20%.
“We shouldn’t think of the Internet as just a way to put brochures online, modeling the old way of selling,” Galen says. “We have the opportunity to provide a new way of selling that’s more informative and more enjoyable, an overall better buying experience.”