iBidCondo in action…
[youtube = http://www.youtube.com/watch?v=lSLO3i2jmX4]
The first iBidCondo auction was held last night. The result was a high bid for the right to purchase a condo originally priced at $690,000 at the Star Riverside – located on I35 and Riverside Dr and planned to be complete in 18 months – for $87,000.
Watching the video above, the process is just too anonymous for me to get comfortable with. At the recent Brazos Place auction there were hundreds of real people in attendance. You had an existing building. You could see the person that won each auction. The market clearing price for Brazos Place’s 19 downtown Austin condos was $282 per foot. The auction company was not affiliated with the developer.
From the iBidCondo FAQ:
“A selection of the properties listed on iBidcondo are being developed by Constellation Property Group. Constellation Property Group is an affiliate of iBidcondo.”
Constellation Property Group is the developer of Star Riverside condos. Constellation Property Group is also listed as the registrant contact for the domain iBidCondo.com. It appears CPG is more than just an affiliate.
Was this a real auction? Or, was this was a cunning loss-leader for Constellation Property Group?
I suspect there will be a couple of people that will “win” these “auctions” and have the right to close on the units for highest bid once the building is complete. In my opinion, the risk of Constellation not completing construction is real and iBidCondo only serves to further that concern. Constellation wouldn’t sell every unit like this and still expect a return on investment of construction dollars.
Hmmm…
Paul D’arcy has an interesting write up at Austin Towers and DAB will continue with updates as I learn more.
-Jude
I wonder what happens to all the people that bought seats for auctions
And the website is closed down! So, the caveat emptors and the saviors of the real estate market are gone already!
Well, thanks for the write up, Megan.
lolz, the sales office on Cesar Chavez after months, ney years, of sitting idle was finally cleared out a couple of weeks ago.
Hi Jude,
I wanted to address your concerns about the validity of the iBidcondo auction process and it’s properties.
The first Star Riverside Condo won on iBidcondo is slated for completion in May 2010, which is less than 12 months away, not 18. The Star Riverside project is still under construction. They’ve only found a unique system to sell their condos more efficiently through iBidcondo.
Regarding the concern that the process is too anonymous, iBidcondo feels it is no more anonymous than a brick and mortar auction, you may see people at an auction but it’s highly unlikely an auction participant will know their fellow bidders and many times the auction participants in the audiences are representing anonymous bidders who have chosen not to attend the auction. There’s also the dimension of phoned in bids at these “traditional” type auctions. With iBidcondo, an auction participant can see that real people are making real bids in real time. Even when someone makes an offer on a property for sale to a broker and are then told that the broker has received a more favorable counter offer from another seller, you can’t see the people behind that better counter offer.
As far as Star Riverside’s ownership, Star Riverside is the only project available on iBidcondo that Constellation owns and it is only partially owned by Constellation. The majority of the property is owned by investors other than Constellation. There are many more properties listed and coming online that are completely removed from the Constellation Property Group. Using a CPG property for the first auction was simply to get the process rolling and introduce iBidcondo’s unique selling system to the world. iBidcondo will sell projects that are complete as well as projects under construction. There are 3 upcoming completed projects, set to be announced within a matter of weeks.
With your concern that Constellation will not complete construction, I must stress to you again that Star Riverside is still under construction. Moving forward the completion date is set for less than a year away. If there is any concern regarding the security of the condos being purchased on iBidcondo, all the money is held in escrow. The developer, in this case Constellation Property, cannot access the winning bid until the project is complete and the title can be handed over. iBidcondo makes sure to protect it’s auction participants and winners.
Finally, the article you mention by Paul D’arcy at Austin Towers was actually written before the first auction and with much skepticism. I encourage you to watch a recent report from CBS’s The Early Show focusing on a couple sold a property in a similar fashion to the ones on iBidcondo http://www.cbsnews.com/stories/2008/03/24/earlyshow/main3961672.shtml.
Another example is Jennifer Grey’s story http://www.3news.co.nz/Video/Raffling-off-the-American-dream/tabid/369/articleID/96818/cat/61/Default.aspx.
I hope this information is helpful and has reassured some of your concerns. If you would like I’d be happy to set you up to speak with the founder of iBidcondo or perhaps the couple who won to answer any more questions .
Best,
Megan