COVID-19 has completely transformed how we buy and sell property. And now real estate transactions are about to change again.
With lockdowns worldwide, buyers have been unable to attend traditional Saturday open for inspections and auctions. When the pandemic first started, there were rumours the market would slow, but it turns out it was just the push the property market needed to evolve to the next stage—digital online auctions.
More sellers are now choosing to sell via online auctions themselves than ever before – because the internet just makes it so easy.
Because online house auctions are a relatively new phenomenon, we thought we’d take this opportunity to answer all your questions about how online auction selling works and more.
Read on for the skinny on how this brave new digital world will revolutionise how you approach selling your own home.
How do online property auctions work?
Online auctions are quite like traditional, stand-in-the-front-yard real estate auctions in that buyers still place bids while watching the auctioneer—it’s just that everything happens virtually via a screen.
There are two ways online auctions can work—via a live stream (registered bidders go up against each other in real-time) or something that looks more like an eBay auction, which has a start and finish time.
In fact, an online real estate auction is a super-easy way to buy or sell your home. Online transactions make sense because buyers are already comfortable conducting their property research online—the next step is to make a bid straight from the listing.
An online property auction usually lasts several days, which gives all participants valuable time to decide in comfort, unlike a traditional on-site auction that ends in minutes and causes high stress levels.
It’s a secure, compliant process that allows buyers to bid in an auction wherever they are, meaning increased buyer reach and participation, resulting in better outcomes.
How do I know if my house will sell at an online real estate auction?
Multiple factors determine whether your home will sell at auction online, just as in a traditional auction setting. These include its location, condition, size, age and value.
In fact, everything you do to prepare for a private sale remains true for an online real estate auction. Check out our ultimate guide to preparing for a private auction for more details and tips for selling your own home. They work just as well in an online context.
How are contracts handled after a successful online auction?
The contract is sent to the winning bidder, who signs off electronically through the site. Once this happens, the contract becomes binding, and all monies paid become non-refundable.
If a buyer fails to pay within seven days of signing the contract, some agencies reserve the right to charge them up to 10% of the total due as administration fees.
What are the advantages of selling my home at an online auction?
Online property auctions have a few unique advantages for sellers. These include verifying bidders digitally and requesting pre-registrations for auctions, asking qualified bidders to pre-sign contracts before bidding commences, and negotiating post-auction sales virtually if the property doesn’t meet its reserve price.
Other advantages of online property actions include:
- A secure way to sell. Online auctions platforms are fully secure and legally compliant, with genuine identified bidders and enforceable contracts.
- Access to more buyers. Buyers can bid from anywhere with access to the internet, anywhere in the world, so you potentially have access to more buyers than ever ready to secure their next property.
- Avoid scheduling conflicts. Because buyers can bid on multiple auctions on the same day, you won’t miss out on attracting a crowd if your auction is scheduled simultaneously with hundreds of others.
- More comfortable bidders. Online auctions take the stress out of bidding for people who don’t feel comfortable with the traditional process. That means you can encourage more buyers to attend your auction, and they may feel more competitive away from the auction spotlight, which can potentially drive up your sales price.
- Extended exposure. Every auction is catalogued, so it’s easier for potential buyers to search for properties they’re interested in. Google does all your marketing work for you.
- No commissions. There are no set-up fees, no commission charges and no legal fees associated with online auctions.
- Passed in? No problem. Get instantly notified if a buyer expresses an interest to negotiate the sale price.
What are the advantages for buyers at an online auction?
- No running around town. The biggest benefit of purchasing a home from an online auction is that you don’t need to attend open houses or auctions physically. This saves time and money, especially when you consider that most homes go under contract within 24 hours of hitting reserve!
- Auctions are more transparent. Buyers can participate with confidence because all bids are disclosed in real-time.
- It’s easier to do your research. Keep your finger on the pulse by watching live property auctions in the areas you are interested in.
- Attend multiple auctions at once. Buyers no longer need to choose which auction they’ll have to miss. Online auctions mean they can watch and bid on multiple auctions at the same time.
- Passed in? No problem. Passed-in Protection lets buyers instantly notify us they’re interested in negotiating to purchase your property.
Want to know more about online auctions and how you can use them to maximise your sales price?
We’re here to help. Our team has been helping people to sell their own homes since 2006, so we know how to guide you to make sure things go smoothly.
That’s why we provide free support throughout the entire sales cycle and full access to our property experts via phone call, SMS, or live chat.