Written by: Will Thompson on 28th June 2023
The rise of digital technology has brought everyone closer together and made it easier to perform tasks that would previously have required in-person attendance.
Auctions are one such example. We're all familiar with auction houses, where bidders sit in a room and raise their bidding paddle if the lot the auctioneer is currently offering takes their fancy. Now, however, there are online alternatives.
There's no great secret here: an online property auction is exactly what the name suggests: a virtual auction house where potential buyers make bids through their digital device rather than in person.
The process works well for buyers, sellers and the auction house itself, as a wider audience can be attracted to an auction regardless of their location or personal circumstances.
As the process takes place entirely online, interested parties must create an online account to participate.
This tends to be very easy and only requires standard details that you’d provide to any website you’re looking to buy something through, such as your name, email address and postal address.
With homes on the line and auction houses keen to remove the possibility of timewasters, proof of identity (such as a passport, driver's licence or utility bill) will be requested as well.
Whether they're at an auction house or online, auctions tend to move quickly and successful bidders have the deposit taken from their account as soon as they've won the bid. This means that interested parties need to add their payment details to the website once they've set up their account and before they start bidding on anything.
Once a bidder is registered and taking part in an auction, it's a simple case of getting the bidding underway.
Bidding happens in real-time, which works in exactly the same way as traditional bidding does: a bidder puts in their offer and keeps bidding if their original offer is surpassed by someone else. The only difference is that the bidder is doing it through the Internet.
There are two types of online auction and they differ in what happens once the auction is over.
The first type is an unconditional online auction, sometimes referred to as the Traditional Method of Auction. In this type of auction, contracts are exchanged as soon as the bidding is complete. The second is a conditional online auction, sometimes called the Modern Method of Auction (MMoA), where the winning bidder has several weeks to complete the purchase.
The only other key difference between a traditional auction and an online auction is that while traditional auctions take place on a single day, online auctions can take place over many days and even weeks. The exact duration of an online auction is dictated by the level of interest in the property in question.
Beyond that, the standard considerations around any auction apply to online auctions as well. Potential bidders should:
Online auctions work in a very similar way to traditional auctions. Anyone looking to participate simply needs to set up an account and bid during the auction period to be in with the chance of landing a great new property.
Written by: Will Thompson on 28th June 2023
Will is an auction surveyor at Pugh & Co, representing a wide range of vendors, including local authorities, charities, and corporate and private clients, on the disposal of all types of property and land. Will can provide advice on the value and disposal strategies of residential, commercial, and industrial properties/portfolios, as well as sites with development potential. He holds an MSc in Real Estate and is a member of the National Association of Valuers and Auctioneers.
