The Rise and Rise of Online Property Auctions
Posted by The Landsite on 10th July 2023 -
The post lockdown property boom resulted in an approximate 40% more property being sold at auction in 2022 compared to 2019.
As the real estate industry transitioned online and witnessed a surge in online property views, property auction houses traditionally an in-person industry had little choice but to migrate online.
Online auction - often referred to as Modern Method of Auction - has seen a massive growth in popularity over the past couple of years as auctioneers noted a shift in people’s perception of buying and selling property at auction. Replacing the traditional with the modern method allows potential property buyers and property investors to view an auction and learn how the process works without having to attend in person. More accessible than attending an auction house, a potential buyer can easily log-on to live auctions from the comfort of their home. Prospective buyers are offered support and advice from the auction representative they’re dealing with over the phone.
The underlying reasons why property auctions are growing in popularity from property investors and developers, landlords looking to grow their portfolio to first-time buyers include;
Speed of the sale
In contrast to selling a property through an estate agent, a property sale at auction can be completed in a much shorter period. Once the gavel falls and the property is sold, a 10% deposit of the purchase price is put down to secure the sale.
From this point the sale is legally binding removing the possibility of gazumping or fall throughs. The entire process can be completed by 28 days from sale of purchase.
Connect UK Auctions quote the following ‘Usually the Purchaser shall pay a deposit of 5% and buyer’s premium of 2% +VAT inclusive (or a minimum of £5,000 +VAT) as the contracts are exchanged. The Purchaser is legally bound to buy, and the vendor is legally bound to sell the Property / Lot’.
Buying property at auction is not only for cash buyers
Potential buyers are required to pre-qualify for financing. Specialist finance providers offer property auction finance solutions and mortgages. By securing an Offer in Principle with your auction finance specialist you can bid with confidence and speed.
Type of property sold at auction
There was always a misconception of properties being sold at auction as problem properties, commercial, licensed property, land and development opportunities. This is no longer the case. Residential property is now widely sold at auction. In many cases, property auctioneers have reported above estate agents’ valuations.
Interested in buying or selling at auction? Our auction house members include;
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Source information, guides and property at auction
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