Instead of selling on the open market, more and more people these days are turning to property auctions. They can be a quicker way of selling with less fuss. Find out more about traditional auctions with our blog on ‘This is what happens at a property auction.’
As with many things nowadays, property auctions have also become available online. You can bid on your next investment from the comfort of your own home!
What Online Property Auctions Are
Online auctions for properties can be held by estate agents and auction houses, where they provide listings of the properties up for auction on their websites. These listings contain important information such as photos, details, and essential documents. You can also book viewings with houses of interest to you.
Before the property goes up for auction that you’re interested in, you’ll need to register online to be able to bid. There are two ways to bid online:
- Live online bidding – bids are entered in real-time and you can watch the auction live, this way you can ensure you’re the winning bidder
- Online proxy bidding – rather than being live, this form of bidding allows you to enter your highest offer before the slot begins. If your bid matches or is higher than the reserve price, and is higher than the other bids, you’ll win the property.
The Difference Between Traditional Auctions And Online Auctions
Traditional auctions have the buyer and seller exchange on the day the property sold. Online auctions instead provide an option for the winner of the auction to back out through an ‘Option to Buy’ period after the auction ends. Option to Buy allows the winner an opportunity to obtain the property without contest, and usually lasts up to 28 days to exchange contracts.
In a normal private online sale, offers provided by other buyers are kept secret, even once the sale has completed. Conversely, in an auction, all bids are public.
Costs Involved With Online Auctions
The winning bidder of an online auction needs to pay a reservation deposit of 5% of the winning bid, at a minimum of £5,000. This must be paid within 24 hours of the auction ending. The winner will also be subject to paying the buyer’s premium – a charge made by the auctioneer as a percentage of the sale price.
How To Find An Online Auction
We couldn’t tell you which is the best online auction, as everyone will be looking for different things in the auction company.
You’ll need to do your research to find the best online auction provider for you, whether you’re buying or selling. Some estate agents auction their properties online themselves, and others enlist auction sites to conduct the auctions for them.
You can use popular house selling websites like Rightmove to filter down to auction properties, and go to the auctioneer from there. Alternatively, you can search online for a company which suits your needs. Remember to take into account the fees that the company applies. If it’s a fixed fee and you’re selling a property of lower value, the fee may impact you worse. If it’s a percentage of the winning bid fee, this will be larger if it’s a home of higher value and smaller for a home of lower value, but generally should equal out.
I began writing for Property Press Online in October 2019. Particular areas of interest are housing market news and new developments in the market.