When Tyler Hoggard and Jess Farrell recently bought their first home in Wollongong, the auction took place in the kitchen of the Mount Pleasant home that is now theirs.
- Timed real estate auctions allow people to register and bid on homes over a set period of time
- Estate agent Neil Webster says it gives a greater level of transparency to the buying process as people can see the offers are legitimate
- By conducting the auction remotely, buyers may not establish as strong an emotional connection to a property
They had walked around the place, loved it, and already imagined what life would be like living there.
“This [being there] definitely had an impact on the emotional connection, because it’s always difficult to properly assess the quality of a home from photos and videos,” Hoggard said.
It’s this emotional connection that real estate agents are banking on at auction, but technology could end up negating the effect as more bidders raise their hands from their homes or offices.
Online timed auctions are like buying a house on eBay, away from the theater and pressure of a live auction on site.
“I think the online auction would have created a totally different experience and it would have been much easier to let go when the auction had already gone further than expected,” Mr Hoggard said.
“There’s a strong sense of urgency that comes with being present in the room.”
Online auctions offer greater transparency
Wollongong estate agent Neil Webster recently sold a house in Shellharbour using a timed online auction.
He said while the technology might not be the best for every property, it offered a level of transparency that added credibility to his industry.
“Using these platforms we can operate more seamlessly because people sign up, they bid and it’s like eBay.
“You get notified every time a bid is made and you know someone is really bidding against you.”
He said online auctions give buyers more time to consider their options than an on-site auction.
If a higher bid arrives just before the auction closes, an additional five minutes are added to the auction each time the highest bid is exceeded.
“Sometimes the auction can run past the set time because we have people throwing in a little more,” Mr Webster said.
“That’s what you would do at an auction with the auctioneer saying, ‘First call,’ ‘Second call,’ and then I can talk to the buyers.
“And online it’s the same process – I call the underbidder to see if they have more in the tank and will make another bid.”
Removal of emotional attachment
By taking someone away from the lawn or kitchen of the property they are bidding on, an online auction can sever some of the attachment to a property.
“Being there definitely raised the stakes,” Hoggard said.
“It gave us the opportunity to walk around inside the house and imagine how we would live in different spaces.”
Neil Webster knows this could end up bringing some control back to the bidder at an auction, which is why estate agents can always choose on-site auctions for properties where people are more likely to live.
“If you’re buying as an investment, that’s another thing – you’re doing it online where it’s a business decision and you’re [the agent] encouraging people to buy based on price and return on investment.”