ONLINE PROPERTY AUCTIONS START TO REPLACE THE TRADITIONAL BALLROOM SALES
14 January 2019
Is the traditional ballroom property auction a thing of the past given the emergence of online auctions? This question was posed in the Osborne King boardroom in spring 2018 when we made the decision to invest in our online platform iOK. It was evident to us that the habits and requirements of both purchasers and vendors were changing and we felt there was room for a high quality online platform in the local market.
The number of lots offered for sale via online platforms has increased significantly since 2017 and the transition from the traditional ballroom sales to purely online sales has been swift. Osborne King held the last ballroom property auction in March 2018 with a successful sale rate of 84% and total sales of £6.9m.
Since then we have held two online auctions through the iOK auction platform in October and December delivering an average success rate of 77% which is reasonably comparable to our previous success rates via the traditional ballroom route. We are hopeful that this will increase as the wider market becomes more familiar with the process.
Undoubtedly one of the main differences between the ballroom and online platforms is the competitive atmosphere created by a busy room and, from a selfish point of view, a successful ballroom provides a great buzz for our auction team. However, we have seen some incredibly competitive bidding online to date. For example, a premises in Newry sold in our December auction after some 96 individual online bids.
There are a number of advantages to the online process, for example all purchasers complete anti-money laundering checks online before the auction. The bidding process can be viewed in ‘real time’ on your mobile device, anywhere in the world, and we can run an auction at relatively short notice without the need for a ballroom or printed catalogue. We believe this level of transparency and flexibility is extremely beneficial to our clients.
I think people who haven’t tried either buying or selling online would find the process very straightforward and its actually quite similar to the ballroom process. The steps to buying at an online auction are as follows:
1. Visit iOKauction.com
2. Identify a lot or lots that interest you
3. Inspect the property prior to auction. iOK normally hold a number of open viewings in the run up to the auction day. Why not bring a builder or an architect if necessary?
4. Finance – make sure your funds are fully available as a sale completes usually within 20 working days after the date of the auction
5. iOK work on the basis of a maximum reserve figure, ie the actual reserve price will not be any higher than this published amount of the particulars
6. Arrange a survey prior to the auction day if necessary
7. A title/legal pack is available to download from our website once you have registered at www.iokauction.com. This information is available 24/7 through our website downloadable by you or your solicitor (which we would advise)
8. Subject to you being satisfied and are now willing to bid – ie property and title inspection, finance available – an offer could be made prior. Depending on the offer and client we will let you know whether this lot can be bought in advance
9. Buying on the auction day you will also need to have provided the auctioneers with your photo ID, proof of address and bank card details. These are registered online in advance
10. On the day of the auction and once you have authority to bid, log in to your account and bid once the bidding window opens. Our auction bidding window opens at 9.00am and we start to try and close our first sale of lot one at noon and the remaining lots within a two or three minute basis thereafter. Note if someone bids within the last minute the system will automatically allow any under bidders 60 seconds to bid. Unlike eBay you cannot be ‘sniped’. As is the advice in a traditional method of sale ‘bid early and bid often’
11. Finally, if you are successful we will automatically deduct a deposit amount from your pre-registered bank card and the auctioneer will sign the usually unconditional contract on your behalf and pass onto the vendors solicitor for completion of legal formalities.
As with either type of auction a buyer must be fully aware that on the fall of the gavel, the buyer has entered a legally binding contract to acquire that asset (ie caveat emptor). I would like to think that the traditional method still has a place in the property market, but there is no getting away from the digital age and modern technological advancements in this ever changing world.