Auctions used to have a rather stuffy, traditional reputation – following the same processes for centuries, bringing down the hammer after a barrage of bids from the floor. My, how times have changed. The idea of buying a property on an online platform – sometimes without having seen it, sometimes without even being in the same country – would have been ridiculed just 20 years ago.
Just a few years ago, it seemed likely that the traditional ‘ballroom’ style auction was likely to shrivel and die, but it has not. The traditional auction companies have raised their game and, joined by tech-savvy estate agents, they have created a global technological scene online, accessible to investors, movers, developers and those who crave a piece of history.
So, there’s plenty of noise around the auction process, but is it doing well when it comes to lots listed, lots sold and monies exchanged?
David Sandeman, the leading voice in the market when it comes to facts and figures, says that whilst a review of auction activity in the room shows a decline in lots offered, sold and amount raised, for the first part of this year when compared with same period last year, the same comparison in the online auction space shows the complete opposite.
“We have seen in excess of a 20 per cent increase in the number of lots sold via online auctions with the vast majority of them being sold on a condition sale basis as opposed to an unconditional basis.”
“The growing appeal of conditional sales is based around estate agents teaming up with an online auction provider such as iamsold, Pattinson SDL and GoTo Auctions amongst others, and offering the auction platform to motivated vendors who are keen to sell their property and hitherto have not yet found a buyer.
“The property is offered for sale and the successful purchaser pays a buyer’s premium which is shared between the estate agent and the auctioneer. The vendor does not pay any commission on the sale price. This is providing a significant additional revenue stream for agents as well as achieving sales for slow moving stock, leading to the vendor selling the property.
In fact, says David, “All the indicators are that this growth is set to continue as is the sale of lots by online where the exchange of contracts takes place on the day.”
Drivers of change
Ten years ago, Network Auctions led the way in offering estate agencies the opportunity to have an auction business without having to get up on the rostrum. This was a whole new scene – agents could place some (or all) of their properties on the Network Auctions list as well as in their own agency windows.
Buyers are keen to make good purchases, sellers are also more responsive to ‘before auction offers’. We are seeing this more and more with strong offers being made before auctions. Toby Limbrick, Network Auction.
Network Auctions’ founder was Toby Limbrick of Elliots, an estate agency in Watford. Toby was the driver of change, his bold venture provided an easy route for agents to join in the fun and bring a whole new sales stream. With fellow directors, Stuart Elliott and Guy Charrison, they have built the business into a leading industry name.
iamsold is one of today’s leading lights – they were the winners of ‘Gold’ for the Residential Auction Service of the Year at the Negotiator Awards in 2018.
As an independent auctioneer for residential property, they provide estate agents with outsourced white label auction departments. Currently iamsold works with over 2,000 estate agency branches across the UK, enabling them to offer auction as a core service, whilst they fully manage and support them through training, account management and dedicated teams.
They were also top of the latest Essential Information Group (EIG) league table, in 2018, for residential property lots sold and the market leading auctioneer when it comes to online auctions, with almost 60% overall market share in capital value and units sold.
While the proliferation of online has meant that approximately 75 per cent of properties auctioned by iamsold now sell online, although ‘in-room’ auctions still have their place and the company has a calendar of in-room events so if the timing is right, some vendors prefer this traditional route if it suits their circumstances.
Pattinson Auction is growing fast and recently reported staggering success at their latest national auction May North West Auction which resulted in £14 million pounds of property being sold on behalf of vendors.
Out of 98 lots in the auction, 86 of them sold, highlighting why Pattinson Auction has previously been named ‘Fastest Growing Auction House of the Year’ by EIG.
Auction Director Justin Beckwith said, “We have noticed an upward trend of buyers and sellers alike seeking the security that auction provides, evidenced by an increase in listings and viewings culminating in a huge 88 per cent conversion rate at our latest live event. With fall-through rates of less than 1per cent we are seeing more and more of our customers opting for auction over private treaty, aiding our continued growth across the UK.”
With fall-through rates of less than one per cent we are seeing more and more customers opting for auction over private treaty, aiding our continued growth across the UK. Justin Beckwith, Pattinson Auction.
Partners in traditional estate agency
However, sellers can have the best of two worlds, property lots can still, and are, be directly listed with auction houses, but the auction rooms of today are also fuelled, says Justin Beckwith, by estate agents offering a broader choice to their clients.
“In addition to our live auction successes, our network of partner agents which stretch across the UK. That network comprises over 1,000 branches – and they are also enjoying an upturn in regard to clients seeking an alternative and successful route for property sales.
“This generates an extremely attractive fee from this white-labelled auction facility. Our field-based Business Development Managers are supported by our experienced Auctioneers and dedicated friendly staff at head office.”
Under The Hammer, a property sales website with a nationwide network of estate agents, property buyers, and sellers, has introduced ‘Secure Now’ to its platform aimed at making property transactions instant, more secure, and transparent.
Thomas Gilday at Under The Hammer, has said that the advancements come as a natural evolution, using what the company has learnt so far, “In the last year, Under The Hammer has worked with hundreds of agents, property sellers, and buyers. In that time, we’ve learnt from comments, reviews, and suggestions from all three on how we can improve the service and drive forward the property revolution.”
Sellers and agents can list properties for a fixed price at the amount they desire. Buyers are then able to go online and purchase the property immediately at any time and pay an exclusivity deposit in order to secure the property.
There are then fixed timescales to exchange and complete on the property transaction, with 28 days to exchange and a further 28 days to complete – providing clarity, speed, and time for buyers to secure financing and avoid issues in the transaction process.
The new online player
Whoobid, a new online property auction service, has seen rapid growth in its first eight months with national expansion, new team members and partner -agent growth at a high.
Doug and Alex Haigh, two brothers from Bournemouth, have extensive experience in the property industry say that they saw an opportunity to modernise the traditional auction process. They wanted to create a completely transparent and fair service that provides a personal approach to the auction process.
Whoobid uses an online auction platform that streamlines the auction process for the agent, seller and buyer. Whoobid allows estate agents to offer 0 per cent fees for the seller, this enables high street agents to compete successfully with traditional auction houses and online agents.
Currently working with 150 partner agents, Whoobid plans to see this number double to over 300 in the next six months. This success has seen the rapid expansion of Whoobid’s team to 10 members.
Kieran Hogan joins as a Regional Manager for London and has extensive experience working for a range of estate agents across the London area, including Sequence and Spicerhaart.
Kieran said, “I’m excited to be joining the team at this time of growth and really believe in the service we offer. In this changing market I can see Whoobid taking the property market by storm with this unique platform for property auctions.”
Deborah Latham and Joanna Bradford join Whoobid. Deborah is the NAVA Auctioneer of the Year 2018 and she joins as Head of Northern Auctions.
Joanna joins as Relationship Manager for the North and has 20 years of property industry experience.
Alex Haigh, Director of Whoobid, says, “The success we have seen is testament to our team and the service we provide. We work hard to build relationships with our partner agents, ensuring we are on hand every step of the way to provide a complete package and this shows in the referrals, sales and on-going business we are seeing. We have a steady growth plan in place and we are excited to see where Whoobid will be in the next six months.”