The idea of online auctions entering the real estate world is frightening for most agents. Losing control of the crowd, not knowing if the bidders are real, unable to read the face of the one who’s just been outbid. But with the world now shrinking in terms of purchasers and the fact that we advertise our properties globally could there be some validity in taking house auctions into the online sphere? There are already phone bidders so why not an online bidder?
The idea of attending a house auction frightens many and creates jitters for even the most experienced buyers. The desire to own that piece of real estate, coupled with time pressure and competition who you can look in the eye is enough to turn you off your Saturday coffee. Hence the proliferation of Buyer’s Agents and steely-hearted uncles attending auctions these days!
Whilst property auctions are not the norm in every city they are abundant in some and you need to be able to tackle them if you want to make a purchase. So what if there was another way to buy a home at auction that meant no more eyeballing by competitive buyers and their agents?
eBay introduced the online auction concept to the consumer world and has been accepted by millions as an efficient and safe way to make purchases. It’s good for buyers and good for sellers and brings together both groups across the globe in a marketplace that otherwise wouldn’t exist. However eBay auctions are still quite static (except in the dying minutes of some hotly contested items!) compared to a live property auction. But what if there was an actual auctioneer on your screen, counting out the dollars and raising the hammer? Well it’s happening just like that in the car world on these sites www.turners.co.nz and www.pickles.com.au and in the thoroughbred horse industry here www.inglis.com.au. These sites run live auctions for their products to registered users.
In the property advertising world, realestate.com.au has trialed an online auction process with some of its premium advertising products. An online bidding platform was built using iLance software http://www.ilance.com/products and there were some good success factors which could possibly translate to the selling of real estate via a similar platform:
- the product offered must be in high demand (this would be the case in most situations where an auction is the chosen method of sale)
- the true value of products can be realised by creating competition from a wider audience (buyers from other parts of the country or world could actively participate)
- everyone is given a fair opportunity to purchase the product (removes any barriers to those who may not have been able attend physically)
- ‘faceless’ bidding removed embarrassment and frustration (attending auctions in person can be a high pressure environment where you feel compelled to spend more than you can afford or where you’re embarrassed because you can’t afford anymore)
Obviously when selling online advertising products you are dealing with an audience of people who generally understand and agree with the principles of this selling method. Whereas, when selling a home you may not always be selling to internet savvy consumers. So maybe there’s a market for introducing the online auction into the physical auction so it’s not one thing or the other but both? Still conduct the physical auction in the street or at the agent’s premises but have a webcam set-up so you can stream the auction live and include your online bidders in the process.
Given the success of property portals and online advertising in the classifieds markets in recent years, and the enormous number of consumers who have taken to researching property online, I’d bet that there would be a market for online property auctions.
Who’s game enough to try this first?
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Jo,
You ask who would be game enough to try this first? PTY Auctions is an Australian company that has been webcasting live property auctions with the option of live online bidding for registered parties for over 12 months now. They are working with selected offices of Century 21, PRD, LJ Hooker and Damien Cooley Auctions in Sydney. They are working with Century 21 and Coldwell Bankers on the Sunshine Coast, Brisbane and Gold Coast in QLD. On average each auction event attracts over 200 online viewers, the majority of whom are located offshore in North America, Europe and Asia. The first property sold to an online bidder in May of this year. Anyone interested in the service should visit the website at http://www.ptyauctions.com.au