An Ottawa-based startup is looking to shake up the real estate industry by hosting online auctions for homes, with one small difference—all the bids are in real time and public.
The company is called Unreserved, and they’re hoping to take a piece of the hot housing market.
Anamika and Ashish Srivastrava moved to Canada six months ago. They used Unreserved to buy their first house, on the first try.
“I thought why not? Let’s go ahead and lets go with some numbers,” says Anamika.
Here’s how it works. By using public online auctions, buyers can see others bids, allowing potential buyers to bid more, or bow out.
“And that’s the best part,” says Anamika. “We get to see the numbers on the screen. And that’s when, you know there was like half an hour left and we were like, all game. And it was fun actually.
“I mean, imagine a scenario just sitting casually on a Friday just putting in some numbers. It started as a game. But then when you actually win it, at the end of it you have a house,” Ashish says, laughing.
Founder and CEO Ryan O’connor says he’s created the first ever transparent online housing auction site in Canada.
“The buyers have total confidence knowing that they’re not overpaying $50,000 or $100,000,” says O’Connor. “It’s working. We’re excited that we’ve been able to remove the blind bidding and give buyers the confidence that they needed because a lot of buyers were pulling out of the market. So this is able to bring them back in.”
Unreserved, charging one per cent of the sale price, auctioned its first house a month ago. The company says it is on pace to sell close to 25 houses in September alone.
“All the bidding that happens seems to happen in the last hour, the last half our, the last 10 minutes,” says O’Connor.
Andrew Lemoine just recently sold his house using Unreserved.
“Down to the last second,” says Lemoine. “You know, to sum it up in one word, it was pretty exciting. My whole family was over for dinner. My mom was there, my brother, the kids; everybody was just glued to the screen watching the offers come in, in real time. It was quite an experience, for sure.”
Real estate agent Geoff Walker has been selling houses for 20 years, he says this business model might work now, but could end when the hot housing market does.
“You’re going to drive the price up higher,” says Walker. “That’s what buyers have been wanting to avoid right? Versus a traditional market, where you can work one-on-one with a seller, it gives you a better opportunity as a buyer to be able to not only take your time, but potentially get the property at a price that is not only satisfactory to the seller, but to you as well, without the pressure of other buyers.”
Ottawa Real Estate Board President Debra Wright says she has concerns about this method.
“Real estate sales by auction are not regulated and do not have the same regulatory regime of public protection legislation that real estate by realtors have,” says Wright. “So, this is something that is of concern to us as an industry of course.”
O’Connor admits he had a rough start in business. In 2009 he was convicted of fraud connected to a used car business called “Find a Car”.
He says he’s learned from the experience.
“Not everyone gets second chances and I’ve been very blessed to rehabilitate my name over the last 15 years. Not just in Ottawa, but also in the Canadian automotive community,” he says. “It was that auction experience that lead to Unreserved being born and we look forward to earning the trust of Canadians”
For the Srivastavas, they say this was the perfect way to become brand new homeowners.
“We’re new to Canada,” says Anamika. “New to the system. It’s difficult to navigate the system otherwise. So, I think we felt a lot of reassurance with respect to this particular buying. And we’re excited.”