We wanted to write some tips on buying over parcels in many states from different types of auctions, including eBay. We hope you enjoy them and use the advice to make better decisions about buying and selling on eBay.
#1) Know the Rules – eBay real estate is an HONOR system.
EBay’s documentation says the following: “Unlike listings in most other eBay categories, real estate listings are not a binding offer to sell the property shown.” front and center, like one on its page. If a seller runs a no reserve auction and doesn’t like the outcome, technically, you don’t have any leverage to force them into the deal.
Red flag: How can you sell me something that doesn’t legally belong to you? Why isn’t the person’s name or business showing up at the assessor or in parcel tools?
Remember: Sellers can change the name of the eBay account, deactivate it for six months to scrub negative reviews, and based on some of these profiles being around since 1999, it happens regularly.
- Send the seller a message with basic questions to analyze the responses for clarity, language structure, and the time of day they respond. i.e., I’m in California, but I respond at 3am PT, possibly in the timezone of another country.
- Gauge the response times, depth of reply, and overall experience dealing with the seller. Did they answer all of your questions? If they don’t know, are they simply ignoring you instead of saying that?
- Are you dealing with the person or companies name who’s on the parcel? Why not? Ask them for proof they legally own the property in question. They may be betting on going back to the real owner with a deal, and if the no reserve auction falls short they won’t be able to execute.
- Ask them: Will you cancel this auction if it doesn’t meet your expectation for bidding? Has this land ever been rejected by another buyer? Why was that? Try to find the downsides of the deal, and hone in on what the seller might know about it. i.e., “Do you know of any problems, or concerns that other sellers had which stopped them from bidding, or paying for the auction?”.
#2) Mistakes Happen – They can benefit you or hurt your deals
When the seller says “Do your due diligence” and provides very little on the lot, that’s a warning sign. They’re saying, “I sell paper land, never set foot on it, and probably don’t know a thing about this piece of land,” other times, it’s just the auction format. I find that an incorrect APN, GPS coordinates, or pictures of the wrong location may throw other people off. I use multiple tools like Regrid, Mapright, Google, and the assessor sites to find the real deal. You’ve got to keep cross-checking information, especially the following:
- APN / Parcel Number: Is it the right one? Can you align yourself with the pictures using another tool? Are there too many trailing zeros throwing off other tools? i.e., 00020392894 can be written as 000- 203-92-28940-00-000, which hampers your ability to search.
- Property Taxes: Did you check with the assessor’s office to confirm those taxes?
#3) Add Value to your properties to gain more profits
Many sellers choose to do little to anything regarding surveys, pictures, drones, or other documentation on the property. One thing you can do to stand out is offer a package for your buyer or do these things ahead of time on your more valuable properties.
- Develop a relationship with local drone operators, real estate agents, and other folks to be your eyes on the ground. If you play it right, you can pay $40/hr for Drone video operators, or maybe $100 for a set of raw photos from an agent without ever traveling to the area.
- Surveying can turn paper land into something that’s easier to understand for a client. Afterall, with Google Maps jumping all over the place walking around in the woods isn’t the best course of action. The stakes can get overgrown, snapped, fall over, rot, etc. Try to have them put in something more permenant like metal poles.
#4) Ditch the copy-cat tactics for your own unique style
Does it seem like everybody has the same eBay auction-style? I think it’s in some training program, or new sellers copy/paste it into their own to save the time on how it looks to focus on the content, well, at least most of the time. Build yours from scratch, and you can improve it over time. Try to focus on accurate details because you’ll notice some of these BIG RED LETTER sellers get it wrong and don’t spend much time, if any, verifying the details of the auction. I’ve seen duplicates, mismatched pictures, and tons of other weird stuff that takes away from the primary information of the property.
#5) A picture is worth, nothing. Find out where it came from!
Sweeping views? 180-degree view of the lake? Horses in the picture running down the hillside? Folks on the beach swimming at the lake. These are all examples of BS in auctions that are meant to persuade, and if you look CLOSELY, you’ll realize it’s just filler for somebody who has usually never gone to the location. They’ve got to say something, and what you find in the auction is what they found online from other realtors, google images, and searches across the web. I have seen many of these and learned to cut through them to confirm they don’t have accurate pictures.
#6) Ask for a breakdown of the Auction Fees
We put our auction fees in a retainer so you can understand how they’re being used. Did we write a $200 check to the county for the deed transfer? A pro-rated tax for the property to cover a few months into the year? Try to find out how it’s being used. The fees can range from $195 to $799 and even go as high as $1,200 in some cases. Here’s the deal: The person wants to do a deal of ~3k for the land, but if it’s a no reserve, what they’ll do is calculate out the broker fee. i.e., I want to make $300 off this deal, so I want to get that profit even if it sells for $1. I’ve willingly PAID high fees for super low auction outcomes and made out like a bandit! Don’t cry about them; ask where it’s going because sometimes the deed transfer process can be hundred(s) of dollars in total.
#7) Bid Snipers – Know your Limits
I’ll admit it. I’m a bid sniper. I’ve probably pissed some people off, but what else could I do? Why raise the price of the auction well in advance of the close? I come in late and bid my maximum, which could be substantially higher than the current auction. i.e., In the last 10 seconds, the auction is at $600, and I bid my maximum, which is $1,500. It doesn’t “show my hand” or do anything except ensure I win over the people who WOULD have paid that much but didn’t want to use the automatic bid system. I mean, let’s be honest, if it’s gone over your budget at ANY point, even in the last second, then you lost it. Know your limit, and come prepared to pay it. Don’t build an expectation that an auction sitting for a week with you as the highest bidder won’t trend higher. I will put $5,000 into an auction ending that is barely about to break $1,000. Why? Because I’m not going to lose to someone who bids $1,001 on something I’d quickly pay 5k for at the highest rate, and nobody sees my bid anyways, so who cares? I’m also not going to lose if he goes to $1,500, $2,000, etc. See my point?
Tip: You can enter multiple consecutive bids into the auction. i.e., Enter a request to become the highest bidder at $600, then even if you’re not contested, what you do is bid your MAX exactly when a bid sniper would try to attack. If you’re the highest bidder, it looks like you’ve done the same thing twice, with a different timestamp to any outsider; they don’t know it’s a ‘dual-bid’ with overlap that takes it to the next one automatically. Don’t be cheap; figure out the max, and then put in your move to lock in the land. Got it cheaper? Great! Hit it right on the mark? Awesome. It’s better than losing, and remember, you don’t know what someone else’s max is, so don’t keep bidding your absolute minimums if you don’t want a sniper to lay you down at the last second! Take it from a winner; trust me when I say it, you’ll never be the winner if you can’t balance time and your absolute max for the parcel. You’re losing because I know my limit, and you don’t.