Homebuilder launches online auctions for new builds

OTTAWA — Something new has emerged in Ottawa’s booming real estate market that could make buying a new home even more expensive.

Homebuilder Cardel Homes is launching an online blind auction for buyers to bid on three new builds that will be ready to move into in about a year.

“It’s really the same product, just packaged a little differently,” says Tanya Buckley, vice president of sales and marketing at Cardel. “The demand has become so strong. We’re looking at that resale market model and saying, that’s what people have been doing in the resale market, we’re kind of looking at that for the new market.

Bidders must first show proof of mortgage pre-approval to qualify to bid, and must also post a $1,000 deposit which will be refunded if they do not win.

“You know we can buy a car online, why can’t we buy a house online?” Said Buckley. “And I think as home builders, we just didn’t design it, package it, deliver it.”

Realtor Geoff Walker of Walker Real Estate Group – RE/MAX says he’s not surprised to see this happening in such a hot market.

“This is a builder who is clearly taking a new initiative in the new construction world,” says Walker. “Most builders sell out within minutes of release. So it’s an opportunity for a builder to potentially get more money, but also to see what the threshold is of what buyers are willing to pay.

And they are ready to pay dearly. The three homes available have minimum opening bids ranging from $765,000 to $833,000.

Bidding started Tuesday at noon and Cardel is already seeing bids pour in.

“New construction is a business,” says Walker. “And if the consumer demand is there, the business goal, in part, is to get as much money as possible.”

Cardel says they wanted to give homebuyers more options than the standard method of buying new construction, which due to demand was becoming more difficult for consumers.

“We had four townhouses that we vacated and had 73 qualified buyers. So how can you start saying first come, first served virtually? Buckley said. “The idea here is that this is an approach that we plan to develop and continue. Regardless of this market condition or market dynamics.

Auctions close this Friday at noon. The winner will be contacted by the end of the day.