Online auctions will become the norm in selling properties in coming weeks after public auctions were banned in response to the coronavirus crisis.
There are about 4000 auctions scheduled for the next two weekends and, while some vendors may opt out to sell by private treaty, many will want to push ahead with auctions if there is enough momentum from buyers.
So how do online auctions work?
Cooley Auctions auctioneer Damien Cooley, who owns live online auction platform AuctionNow, says it runs like a public auction but all the action happens on screens.
He said there were two ways of conducting an online auction, with the first live-streaming.
“The live stream runs and we have bidders registered from remote locations from laptops, iPhones, iPads,” Mr Cooley said, adding that buyers needed to be approved before they were registered to bid on the auction.
“The auctioneer can accept or decline the bid. You can communicate with the online bidder through the website and that’s how they can see you.
“If the property meets the reserve or above, the property sells. If it doesn’t, you can pick the phone up and negotiate with the highest bidder.”
The second form of online auctions is a “genuine time online auction” where the auctioneer virtually oversees the auction and you have a start and finish time – similar to selling an item on eBay.
“You can set the minimum bid increments, you can announce the winning bidders and at five minutes to go, if someone bids it extends by another five minutes,” Mr Cooley said.
“If there’s one minute to go and someone bids, it extends for another five minutes [to give other buyers an opportunity to bid].”
He said once the highest bidder was successful, they conduct a digital exchange through the AuctionNow platform.
“We spent a couple of years building this and another couple of years improving it,” he said. “It has had more than 10,000 auction go through the platform.
“It’s safe, it’s fast and it’s secure. You can watch, bid and exchange on any auction on any device anywhere in the world.”
Gavl auctioneer and Sold By Auctions director Andy Reid, who also conducts online auctions, said it was no different to how remote bidding was done in the past.
“In many ways, this is nothing new in the respect that telephone bidding has been available forever and a day, remote bidding has been available for hell of a long time.”
Mr Reid said Victorian buyers did not need to register to bid whereas in NSW and Queensland they did.
“Once the buyers have registered, they’ll be told they’re getting a call five minutes before the auction [from the agents] … all the purchasers will get a link to the stream too,” he said.
“When the live stream starts, we would make all the declarations as we would.
“Then from there it really works like a normal auction.
“It’s like watching a live video in which everybody knows what to do … and it’s not really more complicated than that.”
He acknowledged the auction process could be slightly slower due to the internet auctions but it still created an auction environment that agents could capitalise on.
In the event of the property passing in, Mr Reid also recommended agents take the conversation to a FaceTime or a Zoom meeting to build a rapport similar to a face-to-face interaction that occurs after a public auction.