Auctioning real estate in Israel

With the advent of internet auctioning what one wants to sell has widened considerably.

By JOHN BENZAQUEN
villa ein kerem 88 224 (photo credit: Courtesy)
villa ein kerem 88 224
(photo credit: Courtesy)
Auction houses around the world are usually associated with works of art and antiques. A system where the seller can get the best price in the market at that particular moment in time for his wares. With the advent of internet auctioning what one wants to sell through an auction arena, that is to the highest bidder, has widened considerably. The wares on sale now include every conceivable item, while the market place has become a global place. Credit cards facilitate payment and a global postal or courier system ensure that an Israeli buyer can acquire goods in a virtual auction arena such as in Hong Kong. This trend has also started to capture the real estate market as more and more websites specialize in the sale of real estate. In recent times the system of auctioning real estate through the internet is gaining ground though slowly and with reason. Real estate sales conducted through an online auction is now also offered in Israel. David Levy a lawyer who specializes in real estate has launched a new website called, mizrachonline, in which homes are been auctioned to the highest bidder. In 2007 approximately 95,000 apartments and houses were bought and sold in Israel of which some 25,000 were new constructions. The majority of apartments were sold by conventional means either through a real estate brokers, the sales network of the development companies or through adds in the media. The concept of auctioning real estate is not new. It has been practiced in this country for many years. Mortgage Banks or commercial banks who had foreclosed on apartments in lieu of unpaid debts usually auction these properties. The same holds true for government agencies who wanted to sell the property of those who died without leaving any heirs and in consequence their estate has reverted to the government. They also usually auctioned these apartments as a means of getting the best price. Announcements are published in the newspapers and the public is asked to submit their bids. This system worked but only to a degree because it was cumbersome and the flow of information problematic, which was probably the reason why it was not widely used. Internet auctioning of real estate is a much smoother streamlined operation and it is a growing phenomenon in the USA despite having many drawbacks. I counted over ten such virtual auction arenas in the USA such as www.expressauction.com, www.sheldongood.com and www.williamsauction.com. David Levy explains that auctioning real estate is advantageous to the sellers because "it provides the seller with an unlimited number of potential clients. And furthermore it eliminates bargaining which may put one of the parties at a disadvantage". Selling real estate through the internet is in its infancy but despite the fact that the virtual arena and the internet provide the seller with a limitless number of clients it has its drawbacks. Buying a house which can cost hundreds of thousands compared to a book at the ABE books website or a DVD Disc or a CD at the Amazon website which can cost $10 is not the same as buying a house. Even if the details of a certain home for sale are viewed by thousands, it seems unlikely, that someone would buy a home without seeing it first because one does not just pay and collect the "goods". The internet is still merely a virtual brokerage. Auctioning a property also has its drawback. It is true that an auction will determine the value of a property at that particular given time but it might not be the price one expected so nothing will come out of that transaction. It would seem that auctioning a property is effective when the property has to be sold because of financial reasons to cover debts or because the previous owner has left this life, and by this means one really gets the best price even if it is less than one expected. So when selling or buying property it would seem that conventional means are the best.