BLOG: Are online auctions the future?

If the pandemic has taught us anything, it’s that the future of real estate auctions is digital. From live auctions to online viewings and auctions, the industry has been swept into the 21st century and online auctions are here to stay.

What are online auctions?

There are two types of unconditional auctions that take place online. Live auctions and online auctions.

Live auctions are most similar to a traditional in-room auction (sometimes they are hybrid auctions taking place both in-house and online). The auctioneer is filmed auctioning off the lots and the video feed is shared online. Buyers can bid in person (where available), by telephone, by proxy or using online auction software.

Online auctions are timed auctions where bidding takes place only online. Once the auctions open, bidding runs for 24 hours with a set closing time. Buyers use eBay-style bidding to submit their bids in predefined increments. Buyers who cannot participate in the auction can set a maximum bid (proxy) and the system will automatically bid on their behalf.

What are the benefits of live/online auctions?

Online auctions have two major advantages. Convenience and accessibility.

Prior to online auctions, buyers had to be able to travel to and attend a full auction event to bid on a property (with no guarantee of success). Not only can this be inconvenient, but it also restricts who can attend and bid, as auctions often take place during working hours.

While telephone and proxy auctions are an alternative to in-person presence, online auctions offer complete control for the buyer.

Today’s consumer is looking for efficiency and demands fast processes and instant results. Online auctions offer this in abundance.

Are indoor auctions redundant?

Nothing quite compares to the thrill of an indoor auction. For today’s auction shopper, live auctions still serve a purpose and for some are the preferred method of buying and selling property. But there’s no denying that the auction customer of the future is likely to be more attracted to a digital experience.

The pandemic has taught us that we don’t need live auctions to be successful at property auctions. The only element currently missing from an online auction is the ambiance of an indoor event. However, as technology advances and is adopted by the industry, it is likely that in the future, the online auction experience will rival an in-room auction atmosphere and in-room auctions could conceivably belong to the past.

Jeremy Prior is Managing Director of Auction House (UK).

To learn more about how to sell a property at online auction, click here.