Business Matters: Online property auctions… what are you missing out on?
The technology to deliver property auctions online has been available for some years now
As an industry, the willingness to promote the benefits of them - and then host one, has been very slow. James Ashworth of Landwood Property Auctions looks into the reasons why this might be.
There’s no doubt a busy auction room with multiple lots being offered on a single day can be very successful. Certainly, a buzz can be generated, and it helps for clients to see a tangible, physical event to justify the fees and costs they’ve incurred.
In a way it’s understandable that an auction company would be wary about taking properties out of a room auction and putting them online – if they do that, aren’t they damaging what they hold so dear and they perceive to be so valuable to their clients?
But is this view point justified? My view is… not really.
The reality is that the auction itself is a just a very small part of success. There is a lot more in the lead up that influences the sales result to a far greater degree. The concept of how an auction works couldn’t really be simpler, so what is it that makes the difference?
Recipe for success and the traditional room auction
Once we’ve agreed an appropriate guide price – and likely reserves – with the seller, what’s next?
From experience, I know auction properties always tend to generate good levels of enquiries, but often parties who are genuinely interested don’t turn up to bid at a traditional auction. Why is that? It’s a combination of factors.
The industry can rely a bit too much on the out-dated idea of caveat emptor – the principle that the buyer alone is responsible for checking the quality of goods before a purchase is made – perhaps as an unintended consequence of business models built on churning out sometimes hundreds of properties in a single day.
Some people simply get nervous about attending an auction. To the inexperienced it can be daunting, they don’t like the fact they can’t be sure who they are bidding against, plus busy lives mean they can’t be in two places at once.
Once an in-room auction is underway and going well, it can of course get great results, but see what happens when a few properties in a row don’t sell. The whole atmosphere can flatten, there’s a palpable drop in the bidders’ mood and people who minutes earlier were keen to bid can change their mind.
Of course, I’m not down playing the skill of a good auctioneer, but would you really want to rely on them having a good day, or an “easy” room to work with if you had a property to sell?
Why online property auctions are the future
However, I do believe that those with vision will press on to be among the early adopters and their clients will benefit.
My belief is that online auctions will give both sellers and buyers all the traditional positives that auctions have always offered, but with many additional benefits.
Online auction benefits to property sellers and buyers
Going online means their property can truly appeal to a global audience and effectively market to, and allow bidders from, any location.
Add to that the transparency as to what other bidders are doing and whether the reserve has been met, and you’ve got the ultimate property buying platform that’s perfectly accessible from your own home or office.
Put simply, online auctions are a lot easier and in a world where people shop, bank and book holidays online, we’re finding bidders are totally onboard with the process.
The challenge we’re facing at Landwood Property Auctions is to convince sellers of the benefits when it comes to online property auctions.
We’ve got a 100% sales rate for online auction lots to date and with Allsops having their first online commercial sale at the end of April and LSH selling a lot valued at over £5M online recently, I think it’s fair to say that online sales should become more and more popular.
Director, Landwood Property Auctions
By Beth Fox