Across one city in Michigan, property owners are turning to the Internet and online auction to move sales. A building in downtown Detroit isn’t your standard eBay listing, and the property owners are using property-based selling sites such as Auction.com, but the principles of the Internet auction remain the same. By going to the Internet, property owners reach a larger audience and are more likely to sell a property at a decent price point.
Chinese bidders won a building that dates back to 1920, when it was constructed as offices. As of the 1990s, the building had been leased as apartments, and in December 2013, the bid was close to $2.8 million for the property. Another property was purchased by Chinese developers for $9.4 million in October 2013. That property was a 38-story brick skyscraper.
Other developers purchased a former newspaper building for $4.2 million and say they will gut the building and convert it into apartments. An old downtown hotel sold to a bidder in April 2014, though the winning bid was not made public.
As in traditional commercial property sales, not every transaction goes through when dealing with online sales. One building hit the virtual auction block with a starting bid of $4.5 million and did receive offers. However, the building failed to sell, possibly because bids did not reach a reserve price. The auction company did not disclose details of the bids. Another building was pulled from an auction before the bidding started because the planned auction generated enough outside interest in the property.
Selling property online comes with many of the standard real estate transaction issues, as well as other concerns that come from dealing with the Internet. No matter how individuals or businesses plan to move real estate, following through with all legal requirements and using strong contracts can protect financial and property interests during and after a sale.
Source: Detroit Free Press, “Online auctions boosting Detroit commercial real estate” JC Reindl, Jul. 20, 2014
