On-line home auctions are a phenomenon that is sure to change how real estate is transacted in this country.

The nation's fist and only home auction site, Homebid.com has launched with big plans for the future as the only on-line auction service to include broker-represented private residences among its offerings. Homebid.com has received $21 million in venture capital from three firms which will be used to expand awareness of the site and expand the site's services, including the addition of private residence auctions by the end of the year.

This new business model promises to offer brokers an enhanced means of marketing homes outside of traditional mediums such as open houses, newspaper advertisements, and multiple listings services.

Powered by one of the largest home auction companies in the business, Larry Latham Auctioneers, (The Latham Company,) the site will at first feature registered broker-only home bidding on-line, the only site on the Internet to offer real time bidding on-line.

The feasibility of on-line auctions was proven unequivocally when the Latham Company hosted the world's first three-day auction in Hartford, Connecticut in January, selling 137 homes at 97 percent of appraised value and 136 percent above the reserve price (the minimum a seller will accept for the home.) The transactions totaled $7.5 million.

Homebid.com has coupled the traditional real estate auction with the Internet to produce the real estate e-auction, allowing buyers, brokers, and sellers to capitalize on the Web’s unique ability to bring an unlimited number of participants together under one roof. The virtual roof can be handy. The Hartford auction took place during a winter snow storm, which would have limited participation by buyers and brokers, and perhaps yielded a less impressive sales record. Not only are weather barriers eliminated, so are geographic barriers. Assets can be transacted on-line by far away buyers and brokers with confidence, convenience and ease in a secured environment.

Realizing that unfamiliarity with the home auction bidding process might be a deterrent for some parties who might otherwise be interested in a new resource for finding homes, homebid.com offers a number of consumer-friendly features including on-line education, real-time 24-hour "bid-by-phone" service, automatic bidding via AutoBid on-line, and advanced e-mail and phone notification. On-line transactions are made easy for consumers with step-by-step processing from title clearance, to escrow, to the closing process. Customer support is available at 1-602-998-1168 ext. 30, Monday-Friday, 9-5, Arizona time.

Homebid.com helps buyers with their due diligence, educating the consumer about the auction process, terms, and putting them in touch with property information and photographs of properties. Buyers can find the home that matches their individual needs in terms of price, location and features, but as yet, they are not able to bid directly for homes. Due to fiduciary agreements with the many government and regional lenders and insurers, homes must currently be transacted through an authorized broker.

Authorized buyers' brokers have increased business opportunities with a broader market. Instant access to forms and other necessary materials makes the closing of the sale go more smoothly. In addition, the site offers special training to help brokers manage the on-line transaction with more confidence.

Sellers benefit by the increased number of potential bidders afforded by the Internet business model. According to company spokespersons, homes sell quickly and at or above fair market value. Homes have high visibility on the Web site.

It will be interesting to see Homebid.com's success winning brokers over with what promises to be a new business model for them. The company is already working with some large brokers in test markets to promote home auction as an enhancement or alternative to traditional home marketing methods.