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"Real Estate Auctions On the Web"


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Emmitt DeMoss & Bob Potter Photo
8/7/98 Interview with Emmitt DeMoss & Bob Potter

RealBid
700 Larkspur Landing Circle
Larkspur, CA 94939
Biography

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Introduction to Real Bid

  1. Real Bid has created a cyberspace marketing campaign for major institutional properties; the site is a brochure on rocket fuel, intended to complement and supplement the broker's market notification process.
  2. A web site is created for the property; e property is matched with a database of appropriate Real Estate buyers/investors, who are sent aprivate announcement with a password inviting them to contact the broker directly or visit the web site.
  3. A matched buyer/investor can review preliminary information on the website and actually execute a confidentiality agreement and register online.
Who Uses Real Bid

  1. The initial market was institutional investors (principals) - ideal active buyers with solid resources, a long-term horizon and an orientation toward technology.
  2. A migration has occurred to brokers, who were at first fearful that RealBid was trying to replace them; in fact, Real Bid enlists broker assistance.
  3. Brokers are now coming back to Real Bid to ask for joint presentations to generate new business; the database is so current and so deep that it helps brokers to achieve better execution for their clients.
Advantages of the Real Bid System

  1. For the seller (principal and broker), the system provides greater and faster access to the market, creates greater competition for the asset and provides standard execution.
  2. The broker benefits from the supplemental market notification process and from a database maintained for them;. the sale is organized around a date-certain event so that interested parties step right up with their offers.
  3. Location of third party research and resources makes evaluation of the property easier and allows buyers to make decisions quickly; buyers see more deals at no charge to them.
  4. All parties are gathered together in one convenient location, the information they need is provided so they can transact quickly.
  5. The system parallels conventional marketing, but leverages it through technology;the Real Bid marketing approach shortens the cycle, makes it more timely and efficient, and assures full coverage immediately.
  6. Real Bid also supports its Internet postings with more traditional communication channels - fax broadcast, database technology, email technology and telephones.
Costs Involved

  1. The average property size to date is $23 million and dropping; Real Bid costs run 2-3 basis points, and discounts are given to multiple users; maximum for one property is $5,000.
  2. Real Bid is paid a flat fee by the seller for up-front broadcast services; the company does not participate in commissions, and there are no ancillary or upside charges; the buy side pays nothing.
Reaction of the Industry

  1. Sellers and brokers were initially skeptical; the commitment of Prudential to use Real Bid exclusively for dispositions for two years started a parade of users; momentum picked up as credibility and confidence grew.
  2. Brokers now recognize that Real Bid offers them opportunity to reach an exceptional group of potential buyers in a matter of minutes; the password and exclusive listing agent feature protect their interests.
  3. Real Bid was born out of the recognition that the Internet is a natural way to improve efficiency in the Real Estate industry by packaging and disseminating RE information.
Maintaining the Real Bid Database

  1. The foundation for the database came from the publishing firm Institutional Real Estate, a Real Bid partner; Potter & DeMoss continue to add to it by methodically searching out and educating anyone who had a transaction that wasn't in the database.
  2. The database expands naturally as a course of the work flow; new names and buying profiles come in with the multiple bids generated by institutional postings.
  3. Database information is also collected and updated via the web site -Real Bid asks visitors to register and complete a buyer profile; quality control is provided by feedback from brokers.
  4. The broker and principal actually decide to whom information will be sent; they use their own discretion and do their own screening.
Adapting Web Site Principles to the Appropriate Market

  1. Real Bid has been resistant to banner advertising because the site is a high-service/low-volume play due to the nature of its market up until now.
  2. The Commercial/institutional side benefits from its "demand-push environment;" on high-priced properties, potential buyers are known and can be approached directly; the market is consistent because the players areeach buying and selling a hundred+ properties a year.
  3. As you move down the spectrum in size for both Residential and Commercial, the players become less consistent, and maintaining a database makes less sense; a "demand-pull environment" requires driving people who are temporarily in the market to a web site for information.
  4. The large, lower-priced markets are user-driven while the smaller, targeted institutional market is operator-driven; as Real Bid migrates into the larger markets, it will have to learn from its Residential counterparts.
  5. Blending high-tech with low-tech approaches has been a key to Real Bid's success; follow-up to email by fax and telephone are an assurance that profiles are correct and necessary information has been transferred.
What the Future Holds

  1. Potter envisions web sites soon becoming obsolete, except for the demand-pull variety; for e-commerce, databases will drive what would have been on web sites directly through email.
  2. DeMoss thinks that the web site will continue to play a significant role as a forum where trading can be conducted and integrated with supplemental services.
  3. Society members are offered a one-time 50% trial price on one full Real Bid promotion. The property must be $5 million or larger and be a property new to the market.
Contact Information for Emmitt DeMoss & Bob Potter:

(v) 415-464-4916
(f) 415-453-7550
(e) edm@realbid.com
(w)www.realbid.com


Real Estate Sites & Tools in this Briefing:

Realbid.com