As our everyday habits morph and adapt to global transformations and technological advances, we sometimes find ourselves on the fence between tradition and progression. The accepted norm of property auctions themselves has evolved to meet the needs of a changing environment and you may be wondering where you now stand. One thing appears certain, house auctions online are here to stay. The question under the hammer today is, are they better than in-person auctions?
The Boom of House Auctions Online
House auctions, broadly speaking, have in the past been the territory of sellers in a hurry and buyers with money. Auction conditions require a commitment to complete within 28 days as standard, thus attracting investors who have funds ready to go. In recent years though, this has begun to change.
Certainly Homes Under the Hammer should take some credit for captivating the nation and bringing house auctions to people’s attention. However, the unforeseen conditions that began in 2020 caused a rapid change to the buying and selling of property, resulting in an eventual sales explosion throughout 2021. House auctions evolved from a once a localised get-together of house traders into an online property showroom that could be accessed from behind the safety of a computer screen.
From 2020 onwards, auction companies have reported huge increases in sales and also elevated numbers of buyers looking for a home as opposed to an investment. As the nation adjusted to interacting from a distance, the accessibility and ease of house auctions online has grown as the auction companies too have yielded to change. Will we experience a shift in popularity back to in-person auctions in the future? As we shall see, both in-person and online auctions have their merits.
Property Auctions – back in the day
A packed room of tension and excitement, brochures at the ready, and a sense of anticipation as each lot is introduced. There is something emotionally evocative and even nostalgic about a property auction, even if only watching on television. It is surely the face-to-face interaction that is the biggest asset of an in-person property auction. Being able to see the room, who is bidding and interpreting the emotions.
In-person auctions also allow for a direct conversation between buyer and seller, an especially important feature for pre-auction and post-auction offers. The obvious drawback of course, being that the buyer must be at the auction in person to bid, or at least have a representative acting on their behalf. The added time it takes to travel to an in-person auction may be a hindrance for some, but it can also be a benefit for others.
The physical attendance required for an in-person auction will place a natural cap on the number of people who will be there to bid. Fewer bidders should in theory result in lower hammer prices. A resounding cheer from the direction of the buyers but a less favourable sigh from the sellers. Online property auctions, on the other hand, open the doors to vast swathes of potential buyers, ready to commit with just the click of a mouse.
Online House Auctions
As we have discussed, the main point of difference between in-person property auctions and online auctions is bidding from the auction room or bidding from your living room. Online auctions can follow either a traditional process that requires the buyer’s commitment once the virtual hammer comes down or a modern process which extends the completion period to allow time for funding to be arranged.
The process therefore, can be much the same as an in-person auction, just from a distance. This distance-bidding approach enables greater flexibility for all involved, meaning the face-to-face contact is traded-in for convenience. As previously touched on, house auctions online have a much greater audience reach and therefore tend to achieve higher prices for the seller.
For traditional auctions, either in-person or online, it is still advisable to physically view the property beforehand to understand what it is you will be bidding on. The legal pack will still require the scrutiny of a professional eye to weed out any potential issues, clauses or causes for concern. Finally, funding will need to be arranged pre-auction to allow for completion within the expedited timeframe.
Which is better?
Customer trends will likely determine how auction companies operate in the future. From their perspective, removing the overheads associated with a physical auction house are likely to be welcomed. As investors, will online auctions be favoured over in-person auctions? Both have their merits and drawbacks. It will depend on where both sellers and buyers place their priorities.
Would you prefer convenience over face-to-face negotiation? The answer will be determined by your own circumstances such as time constraints, other commitments and travel distance. The three pillars of property auctions will continue to attract an audience however: speed, security and sale price.
If you enjoyed this article, why not let us know what you think about the future of property auctions, either through Facebook, Linkedin or directly. Want to learn more? We offer a specialist Buying Property at Auction Course that covers all of the above, plus everything else you need to know, in great detail.