#Real Estate | 19 min read | Updated: 9/7/2022

How to Build an Auction Platform for Real Estate

Updated: 9/7/2022
, Chief Strategy Officer of Sloboda Studio
#Real Estate
19 min read

Today, online real estate auction platforms have replaced small halls full of people screaming for homes and properties. So, real estate companies should learn how to build a real estate auction software in a digital world.

What’s more interesting is that real estate auction platforms continue to grow. In 2002, 30% of all eCommerce transactions were performed by online auction users.

In 2017, the overall profit of online home auctions reached $394 billion, an annual growth of 13% compared to previous years. So how to build a real estate auction site? And is it worth doing now? In 2020, the U.S. Industry Statistics & Market Research forecast that the industry will only grow during the next five years.

real estate auction website advantages

real estate auction website disadvantages

Types of Real Estate Auction Platforms

Before starting to know how to build a real estate auction site, it’s worth checking out the critical online real estate auction types of platforms for home buying gathered below:

Increment Auction

Increment allows people to increase the price only by a certain number. In simple words, the increment is a minimum amount that can be raised each time. This is one of the most popular types of online home auctions.

Reserve Price Auction

Reserve price lets the sellers set their minimum for the price they need for the property.

In most cases, this price is hidden. Therefore buyers can only see whether the price has been met or not. Once it’s completed, the highest bid wins the auction.

Automatic Auction

At automatic auctions, the buyers set the highest price they’re willing to pay for the item. Then, the system bids on the buyer’s behalf automatically. If another bidder places a higher bid, the previous bidder will be outbid.

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How Does a Real Estate Auction Platform Work? User Roles

Real estate auction platforms usually have three user roles: sellers, buyers, and moderators.

The first two – sellers and buyers – are the roles of the customers on the auction platform. The third is the auction platform which acts as a moderator for buyers and sellers. Let’s take a closer look at each user role.

Sellers

The sellers could be homeowners, real estate agents, investors, or asset managers on the real estate auction platform.

How to Build an Auction Platform for Real Estate: features for sellers

Buyers

Buyers can be users who are purchasing properties for their purposes. At the same time, buyers can be real estate brokers, agents, or real estate investors who buy a property to sell it later for a profit.

How to Build an Auction Platform for Real Estate: features for buyers

Platform Owner as the Moderator

A moderator of a home auction platform can manage the platform’s work. These users and investors are responsible for

  • handling transactions
  • sale and purchase management
  • consulting investors
  • verifying or blocking users, etc.
How to Build an Auction Platform for Real Estate: features for moderators

Types of Properties Listed on Auction Platforms 

Different online home auctions work with various real estate types. We have gathered the most popular homes and properties listed on an online real estate auction in the paragraph below.

Short-Sale Properties

A short sale is a property purchase initiated by a distressed homeowner in an attempt to sell their house for less than the outstanding mortgage on it.

With short-sale homes and properties, both the lender and the borrower get their benefits.

For example, the lender avoids repossessing the property in foreclosure. The borrower avoids ruining their credit and, in some cases, bankruptcy.

Foreclosed Properties

Foreclosure is the legal process by which a lender attempts to recover the amount owed on a defaulted loan. It’s possible by taking ownership of and selling the mortgaged property.

A foreclosure property sale is a purchase that a lender forces. A foreclosure is usually the final step of a lengthy pre-foreclosure process. It is typically aimed at finding alternatives for both the lender and borrower to avoid possible negative consequences associated with this legal process.

Bank-Owned Properties

Bank-owned properties are homes and properties taken into a bank’s ownership after the failure of a foreclosure sale purchase.

Apart from being represented on real estate auction platforms, such properties are also easily accessible for sale on banks’ websites.

As usual, bank-owned homes and properties are sold at discounted prices, making them attractive opportunities for real estate investors.

Flipped Properties

This kind of real estate consists of investor-owned homes and properties that have been fixed up. After being renovated, these upgraded homes and properties are put up for sale.

For example, such housing is usually popular as a first-time home purchase among buyers.

Retail Properties

This type of property is famous for sale among business owners and investors. 

For example, real estate homes and properties are usually used for

  • shopping centers
  • stores
  • other business buildings

8 Must-Have Features of a Real Estate Auction Platform

Before starting a real estate auction platform development, it’s crucial to determine the core functionality needed for an MVP, the product’s first version.

Below, we describe the most important features any online auction should have.

User Registration

User Account Creation

All online home auctions need users and investors to register and create a personal profile. Such an approach helps identify the users and provides smooth communication and cooperation within an auction platform.

As usual, the registration process requires users to specify personal information such as:

  • name
  • street address
  • zip code
  • phone number
  • email address
  • links to social networks

For some categories of users, such as investors, agents, and asset managers, an auction platform may also need the following data:

  • title
  • company name
  • real estate license number
  • real estate license state
How to Build an Auction Platform for Real Estate: registration

Hudson and Marshall Registration Feature

How to Build an Auction Platform for Real Estate: registration

Auction.com Registration Feature

Registering for Home Auctions

Once the user is registered to an auction platform, they can search for properties they’d like to buy. However, to start bidding, the users must provide their credit or debit card information.

This information is needed for all payments associated with the platform’s services, including fees and property purchases. Integrating payment processing software into the real estate auction platform is also essential to enable online payments.

How to Build an Auction Platform for Real Estate: registration to auctions

Registering Feature

Listing Properties

Add a Property

This feature allows the sellers to create a new property listing. The sellers should also be able to edit the information about the property.

How to Build an Auction Platform for Real Estate: add property

Add Property Feature

It is also essential to add a description of the property. It should be as detailed as possible:

  • number of bedrooms, bathrooms, amenities
  • square footage
  • information about suburbs, etc.
How to Build an Auction Platform for Real Estate: properties description

Hudson and Marshall Properties Description

Photos should be clear and high quality to show all the advantages of the properties. It is essential to set requirements for users to upload pictures that conform to criteria such as size, format, and resolution.

How to Build an Auction Platform for Real Estate: high quality photos
How to Build an Auction Platform for Real Estate: high quality photos

Concierge Auctions Platform High-Quality Photos

Auction Timer

An auction timer feature can:

  • display the date of an