For a long time during the housing boom being a broker was a license to print money, but times have changed. Paul Deese saw the writing on the wall. “We had about 9,000 properties up for sale and only about 800 a month being sold,” the long time RE/MAX broker in Desert Hot Springs, Calif. says. “You didn’t have to be an M.I.T. graduate to see the market had gone soft and it would stay soft for a long time.”
Last year he paid $25,000 for a Pacific Auction Exchange franchise. Now Deese auctions homes for sellers who want to move their property quickly. “You’ll get some offers,” Deese says as part of his pitch. “Whether or not you except them is up to you.”
Deese even allows online bidding. Buyers have to put up $5,000 in earnest money, either by sending him a cashier’s check or through on online trust account. He has three properties coming up for sale in Cathedral City on June 2, with minimum bids starting at $100,000. http://www.paxdesert.com
Deese says another advantage for sellers in this model is that they don’t pay a commission. He earns his money from the buyers who must pay a 10% premium. Deese splits that with Pacific Auction and typically another, referring broker. Deese says he’s already sold four homes since starting his business earlier this year, decent progress for a start-up business in a slow market. “I thought they’re be a lot of opportunity,” he says. “Turns out I’m probably right.”
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.