Dot-com pioneer auctions home on eBay

Homeowner sells luxury home online

Monday, October 03, 2005By Janis Mara
Inman News


Dan Whaley's house for sale in San Mateo, Calif.

An Internet pioneer who founded one of the first online
travel networks is selling his Northern California waterfront home on eBay.

Dan Whaley, who founded The Internet Travel Network in 1994
and later sold it to Sabre/Travelocity for $750 million, had href="http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=4407785634" target=blank>received 96 bids on the San Mateo, Calif., house as of Friday, with the highest bid at $812,100.

Selling a home without the help of an agent is unusual under any circumstances, even when the seller uses established companies such as Help-U-Sell and services like ForSaleByOwner.com. But Whaley has gone even further. He put his 1,600-square-foot, three-bedroom house for sale on eBay without even naming a reserve fee.

This meant that, at least in theory, the 1957 waterfront bungalow with a koi pond, a pool, a stone hot tub and a dock on the San Mateo Lagoon, could have sold for 99 cents – a bid that actually was in effect for a couple of days.

"It's a little surreal to be sitting in my house watching the bidding on eBay," admitted Whaley, 36, who also listed the property on craigslist with a pointer to the eBay auction.

"I get my coffee in the morning and sit down and see how much my house is worth. It was really nice to get beyond the 99-cent mark – that really improved my sense of self-worth," joked the millionaire.

Other three-bedroom homes in the San Mateo lagoon area have sold for between $525,000 and $899,000 in the last year, according to San Mateo Realtor Sal Rodriguez. The bidding ends Oct. 5, so there's plenty of time for bids to go higher. Whaley feels confident he'll get a good price.

"So many people early on asked me, 'Why didn't you set a reserve price?'" Whaley said. "But there's an interesting option pricing psychology. Non-reserve auctions outperform reserve auctions by a wide margin because you draw a huge pool of people who bid off each other," Whaley, who was designated one of the "Top 25 Most Influential Travel Executives" by Business Travel News in 1996, said.

The businessman, who says the first travel reservation over the Web went through his living room in 1995, spent a lot of time talking with real estate agents before he decided to sell the house himself.

"When I talked to agents, I know how much I invested here, I know what it's worth and I know it's special, it's outside the norm – this one required special effort. Nobody came to me in a way that convinced me I could have some peace of mind and leave this in their hands. Nobody was really hungry for the deal. So I thought I would do it myself," Whaley said.

Whaley said, "It's not that I would never use a real estate agent, or that I have it out for agents. I think this is a unique sale and I know the house best, so maybe it's the kind of thing where a sale by owner makes sense."

For-sale-by-owner listings are not new on the Internet, but selling a home on eBay is unusual. Whaley acknowledged that the giant auction site isn't the best vehicle for marketing the property to a large number of people.

"I am using eBay as an order taker, a broker between parties, while I market it outside using different techniques," he said.

To market the house, in addition to listing the house on craigslist, Whaley is discussing the sale on a neighborhood e-mail list. "That list is a great place to let people know you're selling your home. Members tend to tell friends who want to live here that a home is up for sale."

The craigslist and eBay listings include links to a href="http://www.lagoon.org/" target=blank>Web site Whaley established as another marketing tool. The uncluttered, vivid site consists of one large square in the center of the page that rotates photos of the Mediterranean style pool, koi pond, Moroccan style fireplace and other features of the home. The site also has links to a description of the house and the bidding process.

There's also a link to the "href="http://www.ellabakercenter.org/page.php?pageid=20" target=blank>Books Not Bars" organization, a group that works to direct youthful offenders to schooling and
other organizations instead of incarceration. Whaley has long been associated with Books Not Bars and is donating a large part of the money he'll save on real estate commissions to the group.

Though eBay's auction system isn't geared toward selling houses, Whaley has come up with a number of mechanisms to compensate.

"Within 72 hours of the close of bidding, I have asked to see some documentation from each bidder that this is a legitimate offer," Whaley said. Bidders must fax scanned copies of loan approval letters or other documentation to a number provided on the eBay and Lagoon.org sites.

This forestalls the possibility of a last-minute flurry of bids, as is often typical on eBay, and also makes it possible to arrange a showing of the property to those who prove acceptable, Whaley said. He'll figure out how to handle the showing later on in the process, he said.

"If there's 200 qualified buyers, I'm going to open the house for two days and not have a private showing. If it's 10, then I'll schedule people independently," Whaley said.

Whaley is working with an attorney who will write the contract, he said. He has also enlisted Rodney David Mann Jr., a mortgage broker and close personal friend, to work with buyers on the financial end of things. Escrow will be handled by Kim Robertson at Chicago Title in Palo Alto, with whom he has worked before. "They will handle the closing," Whaley said.

Whaley is upbeat about the process and sees his novel approach as a natural given his background.

"I've been actively involved in Internet projects, it's in my blood. The Internet is not a different universe," the businessman said. "It's a better way of connecting directly to people than we've had before, and so to me it seemed like a natural way to sell a house."