Sam Kinloch at Clive Emson Auctioneers has watched his business transform since 2020. “We have seen a huge increase in traffic to our website over the last few years, with somewhere in the region of 30,000 to 40,000 visits in the last three days of our most recent campaign.”

If you are the highest bidder at or above the reserve price when the timer reaches zero, you become the legally-obligated purchaser and that is enough to deter speculative buyers. Sam Kinloch, Clive Emson Auctioneers.

Although Sam agrees that some of the increases can be attributed to the changes in post-pandemic habits, he also feels auctions are no longer considered a ‘means of last resort’. “The whole auction process is now more accessible to anyone looking to purchase bricks and mortar. While some are still cash buyers, many auction purchasers borrow from banks and other financial institutions, and we have seen increases in first-time buyers and private individuals looking for their own home.”

Data from other auction houses concurs. The Essential Information Group (EIG) monitors the property auction market and has many auctioneer clients. EIG’s latest newsletter revealed a 23 per cent uplift in the number of properties offered at auction in the 12 months to February 2023. “This is a trend we have seen for the past 12 months and it is partly due to the fact that online auctions are now widely accepted,” says CEO David Sandeman. “We are seeing new entrants to the online auction marketplace as they do not need a physical auctioneer in a ballroom calling out the bids, or indeed a paper catalogue to present the lots. The barrier to entry for acting as an auctioneer has dramatically reduced.”

We are seeing new entrants to the online auction marketplace as they do not need a physical auctioneer in a ballroom calling out the bids, or indeed a paper catalogue to present the lots. David Sandeman, Essential Information Group.

The barrier that David mentions used to be estate agents and auctioneers operating as two separate entities but that is no longer the case. White label partnerships and mutually-agreeable arrangements – during which commission rates for agents are frequently higher than those earnt from private treaty sales – are now commonplace, as are online-only auctions.

Here are eight good reasons to offer auction sales for agents still reluctant to embrace the bid process:

1 More upfront information than the open market

While Home Information Packs are a distant memory, and the Buying and Selling Property Information dataset (BASPI) a work in progress, auctions offer buyers the most upfront information.

Justin Beckwith at Pattinson Auction says auctions can offer all parties ‘comfort and security’ by preparing a vital legal pack upfront. “Agents working with auctioneers can be assured that the sales process is secure and transparent. We prepare legal packs in advance and carry out due diligence on all buyers.”

Sellers can also be confident that the winning bid on the day of auction is the guaranteed sale price – no haggling down or lastminute reduction. Bryan Baxter, Auction House UK.

This freely-available detail supersedes the amount of upfront information currently available when buying via private treaty, and purchasers value this level of reassurance and certainty when decision making.

As well buyers finding new efficiencies when buying or selling at auction, Justin highlights that there are added benefits for agents too. “As well as preparing the legal packs, the Pattinson team also ensures the right marketing takes place, due diligence on all buyers is completed and deposits are taken from purchasers before they bid, which helps protect the agent against any fraudulent activity. This is all done in the background, leaving agents with more time to focus on other aspects of their business.”

2 Attract serious buyers, deter time-wasters and improve transaction security

Sam recognises the same auction benefits as Justin, citing the upfront legal pack as one way the auction process almost self-qualifies buyers and ensures only the most genuine purchasers engage with a property.

“While there will always be an element of window shopping, it is fair to say that auction is one of the best ways of sorting the wheat from the chaff,” says Sam. “The main reason for this is that all due diligence required is carried out prior to the auction. If you are the highest bidder at or above the reserve price when the timer reaches zero, you become the legally-obligated purchaser and that is enough to deter speculative buyers.

“An auction’s transparency – plus the advance legal documentation – allows buyers to make informed choices. After exchange of contracts, a standard completion usually takes place within 20 business days – this removes issues with buying chains and giving a high level of security to the sale,” concludes Sam.

Auctions really are pulling away in terms of transaction security. A case in point is Iamproperty’s statistics, which show its auction sales achieve a 95 per cent completion rate, compared with 70 per cent for private treaty sales.

3 Preserve a ‘no sale, no fee’ offering

Delivering a low-risk strategy to sellers is something agents are keen to maintain – we’ve all seen ‘no sale, no fee’ in a marketing headline – and the Modern Method of Auction (MMoA) presents a way for this to continue. Neil McDonald at Town & Country Property Auctions feels agents need to have another string to their selling bow – one that can counteract any market condition, solve any selling conundrum and come at no cost to the seller.

“We expect that if the market gets quieter on the private treaty side, agents will be recommending ‘no fee to vendor’ property auctions as an option to clients – especially when a quick sale is required or the property is un-mortgageable.”

Helping to promote the MMoA option to the masses is Iamproperty, who has just launched a direct-to-consumer campaign designed to raise awareness of the benefits of auctions, increase consumer demand and help partner agents win even more auction business.

4 Reach a wider audience of buyers

David says perceptions of auctions are changing fast – with a little help from a certain TV show. “Owner occupiers have definitely found a place in auction rooms. Thinking back to when I first entered the industry in the early 1980s, it was only dealers, investors and developers – with very few homebuyers.”

David adds that it was from the 1990s that we’ve seen a steady increase in the number of private individuals looking to buy a property at auction, either as their own home or as an investor. “TV shows such as Homes Under the Hammer have helped the general public get a better understanding of how the auction industry works, which gives them confidence.”

That’s not to say property developers, flippers and cash buyers aren’t active. On the contrary. Auctions are more likely to attract the type of buyer a High Street agent wouldn’t, with properties sold at auction reaching a wider audience than those sold via private treaty.

David also adds that the nature of properties coming up as lots is changing to meet the needs of all buyers: “Whilst uninhabitable properties do still come to the auction room, the vast majority merely need a bit of cleaning, redecoration or a minor refit to be ready for habitation,” thus appealing to a wide cross-section of purchasers.

Online auctions also have global appeal, as demonstrated by the statistics from Bamboo Auctions. As well as the team working with close to 1,000 estate agency branches across the UK, it has buyers registering from over 40 countries on a monthly basis.

Many buyers are put off ‘in-the-room’ traditional auctions where contracts are exchanged within minutes as they can instil a sense of panic or haste but with MMoA, the convenience and transparency of an auction is combined with a more leisurely approach to bids, exchange and completion – especially with events that are held online.

It’s a point laboured by Guy Charrison from Network Auctions. “In the last three years, all auctioneers have found that there are so many more regular buyers and sellers using auctions – the intimidation of the auction room is not felt when you are bidding online. This has definitely made auctions more mainstream and it’s clear that conditional auctions are taking market share from the private treaty market.”

Philip Farrell at Offr agrees that conditional MMoA auctions – which can last anything up to 21 days – have become commonplace thanks to their more easy-going nature and similarities with private treaty sales. These aspects may appeal to purchasers who prefer a measured approach and who need a mortgage, with the time to exchange and complete contracts around 56 days.

Most first-time buyers were unable to secure finance, but the time frames of conditional auctions allow for home loans to be arranged before exchange. Philip Farrell, Offr.

“Consumers are becoming more aware of the different types of sales in the marketplace,” says Philip. “Most first-time buyers, for example, were unable to secure finance to purchase an auction property but the time frames of conditional auctions allow for home loans to be arranged before exchange.”

6 Eliminate gazundering and gazumping

As a buyer, being gazumped at the final hurdle is one of the most heart-breaking scenarios possible. Conversely, the act of gazundering can be devastating for a seller, so who wouldn’t want to promise that these unethical practices won’t happen?

Bryan Baxter at Auction House UK and East Anglia says auctions offer a fair playing field, with guarantees of no gazundering or gazumping. “If you are the winning bidder, contracts exchange on the fall of the hammer and purchasers enter into a legally binding agreement, with no-one else entering into the picture at the last minute. Sellers can also be confident that the winning bid on the day of auction is the guaranteed sale price – no haggling down or last-minute reductions.”

Sellers can also be confident that the winning bid on the day of auction is the guaranteed sale price – no haggling down or lastminute reduction. Bryan Baxter, Auction House UK.

Bryan adds that for estate agents, the security of a sale at auction, with little to no risk of falling through, offers much-needed certainty and confidence in a challenging market.”

7 Keep cash flowing

While sellers are receptive to an auction sale where zero costs are incurred, Jamie Cooke at Iamproperty says many of its agents offer clients MMoA as a way of preserving cash flow and, ultimately, delivering secure and quicker payments. “With us, agents receive a percentage of the buyers’ fee, which can be higher than with a private treaty sale,” says Jamie.

Iamproperty offers agents their fee paid in seven days, from receipt of draft contract, and partner agents can also tap into auction-specific ‘no sale, no fee’ conveyancing. Jamie Cooke, Iamproperty.

“In addition, Iamproperty offers agents their fee paid in seven days, from receipt of draft contract, and partner agents can also tap into auction-specific ‘no sale, no fee’ conveyancing via Medway Law. This gives the agent and the seller the added security of knowing that they will get a quick and reliable conveyancing service, tailored for auction transactions.”

8 Beat the current 150 day ‘offer to completion’ timeframe

Although this figure may not be true of your agency, when Rightmove publishes statistics like this, it tends to find its way into the mainstream media. It’s a figure movers will use as a benchmark and honestly, it’s rather off-putting. “Home movers are more than tired of the long transaction times and the stress is enough to put someone off moving,” says Robin Rathore at Bamboo Auctions. “I believe that if we can make transactions faster and simpler, we might add greater liquidity to the market – people might move house more.”

Home movers are more than tired of the long transaction times… if a vendor wants a same-day completion, it can be accommodated in the legal pack and by the agent. Robin Rathore, Bamboo Auctions.

With Bamboo, agents can choose whether to offer a property for sale by traditional or conditional auction but Robin says he is seeing more traditional online auctions and even transactions that complete in 24 hours. “Whilst we have default durations built into the process, agents can tailor this on a property-by-property basis. This means that if a vendor wants a same-day completion, it can be accommodated in the legal pack and by the agent.”

Even the more gently bubbling MMoA can have super speedy results. Stuart Matthews at Miller Metcalfe estate agents, who uses Iamproperty’s MMoA service, enjoys quick turnaround times. “The 56-day completion timeframe of MMoA, based on standard properties, from receipt of draft contract, is a lot faster than the average completion time in our area.”

AGENTS IN ON THE AUCTION ACTION

Pattinson Auction
and Chestertons
AMY REYNOLDS

“Pattinson Auction has given Chestertons an additional revenue stream, supporting clients who have needed a quick sale but not wanted to compromise on the net result.

We have had auction-sceptic clients but once they receive the bid and exchange instantly, they are delighted, finding the process far less stressful than selling via private treaty. Giving people choice takes some of the stress out of the selling process.

The transition from traditional marketing to sale through Pattinson Auction is quick and straightforward.”

Iamproperty and
Stephen Tew Estate Agents
STEPHEN TEW

“I love working with Iamproperty because it gives you quick and easy cash flow, and certainly boosts your commission fees. It has saved me a lot of time. The number of properties going through with Iamproperty allows our sales progressors to focus on other properties. Once we achieve the sale, we can forget about it and Iamproperty deals with the rest, all the way through to completion. We used MMoA to list a property another agent had struggled to sell. We sold it within a couple of weeks and got great reviews. It gives us security knowing that when we agree a sale, we get paid the following week.”

The post 8 reasons to use auctions appeared first on The Negotiator.

However, there’s another radical shake-up under way on the auction scene, and that is the rapidly growing market share being gained by what is known as the Modern Method of Auction (MMoA). With MMoA, a buyer has to stump up a reservation fee, typically around 3.5 per cent of the sale price (but with a minimum of usually £5,000 + VAT), for which they gain the exclusive right to buy the property – and crucially, have usually about two months in which to complete.

However, if the buyer has to pull out for any reason, other than the property being un-mortgageable, they usually lose their deposit. With an average UK house price in August 2022 of £294,000, that could leave them more than £10,000 (+VAT) out of pocket.

Fierce criticism

The Modern Method has come in for fierce criticism, both from traditional auctioneers who say there is still no guarantee of a sale, and from those who say the size of fees being asked are excessive and motivated purely by profit. Iamsold, one of the largest practitioners of the Modern Method, has just bought the MMoA book of SDL Property Auctions and is now responsible for 0.5 per cent of all UK property transactions.

“The private treaty process is somewhat archaic; it’s dysfunctional, it’s time consuming, and it’s inherently risky,” says Managing Director Jamie Cooke. “Why wouldn’t people be more in tune with a solution that when a sale is agreed at a price within eight weeks it’s going to go through, and there’s a less than five per cent chance of that falling out of bed.

“The benefit MMoA brings for a residential seller is to get the benefit of speed and security, but they don’t have to limit their buyer pool so substantially [as a traditional auction] because they can give a buyer the time to get traditional residential finance,” he explains.

About 40 per cent of our buyers used a high street residential mortgage – it means we’ve got a larger pool of potential purchasers. Jamie Cooke, Iamsold.

“About 40 per cent of our buyers used a high street residential mortgage – it means we’ve got a larger pool of potential purchasers, which means you don’t limit the price as you would do in an unconditional sale.

“Ultimately we’re here to bring an auction solution to a residential seller. If they want to sell a house by private treaty they’ve got to put it on the market and it’s going to take 24 weeks to complete once they’ve agreed a sale, with the inherent risk of it falling through.”

SDL Property Auctions conduct both live and online auctions.

‘Motivated by fees’

In contrast, Andrew Parker, Managing Director of SDL Property Auctions, which conducts livestream auctions, believes MMoA is “motivated by a higher level of fees”. He continues, “Modern Method isn’t a sale, it’s creating a reservation agreement that’s a conditional sale. It doesn’t have the benefits of an auction sale. The benefits to the buyer and seller aren’t really there because, yes, they’ve paid some money, but if things don’t go anywhere that is retained by the provider of that service and the agent – there is no benefit to the vendor.

“I really don’t like the term ‘modern method’ because it implies that the other method is not a modern method – and the word ‘traditional’ isn’t great either.

“For me, an auction is where a competitive bidding environment is created, whether that be online, in a room, livestream – however you create it – whereby on the fall of a hammer, whether electronic or real, a sale is created where both the buyer and seller are legally committed to the sale and the purchase.”

He adds, “In a real auction, if the buyer were to walk away at the end of the completion period and say ‘I can’t proceed’ then the vendor would receive the ten per cent deposit, so there’s some ‘hurt’ money in it. Otherwise, what you are asking the vendor to do in this MMoA world, is take all the risks, maybe be not achieving the price they would have done and then if the buyer chooses not to proceed, they have to go back to the beginning. I just don’t think that’s fair.

“It had an appeal in the market we’ve been in where there is very limited stock; people are happy to pay these reservation fees but it doesn’t sit well with me.”

A role for both methods

Dough Haigh, at Whoobid Property Auctioneers, conducts both traditional auctions via an eBay-style format and the MMoA, and believes both have a role to play. “I think we are seeing massive problems with getting cases through the conveyancing process at the moment but with an auction contract, whether modern or traditional, there are fixed timescales that everyone is working to,” he states.

“Ultimately, I would say in our experience we have great success with MMoA. The main benefits are the security element, but also that it opens it up to mortgage buyers. In an industry where we are struggling to get sales through, it enforces contract and obligations and timescales.”

In our experience we have great success with MMoA. The main benefits are the security element, but also that it opens it up to mortgage buyers. Doug Haigh, Whoobid.

“The biggest criticism is often fees being over the top, but in our experience, we’ve seen great success; we’re getting great buying commitment from it. Vendors, from what we’re seeing, tend to like that option and the reason they like it is because they are opening up the market to more buyers and hopefully they will see a better price at the back end of that auction.”

Haigh adds, “I like to think we are competitive, but I do agree there are some exceptional fees out there in the marketplace and unfortunately that does put people in tricky positions.”

Guaranteed results

Over at Auction House UK, Managing Director Jeremy Prior thinks “there is a place” for the Modern Method, but he agrees with SDL Property Auctions’ Parker that only a traditional auction can guarantee results.

“With traditional auctions you get the security of sale at the fall of the gavel, whether that is a physical gavel or a virtual gavel – you have exchanged contracts and you complete within 28 days, or whatever period of time has been agreed,” he says.

Modern Method isn’t a sale, it’s creating a reservation agreement that’s a conditional sale. It doesn’t have the benefits of an auction sale. Jeremy Prior, Auction House .

“You don’t get security of sale to the same degree as with unconditional auctions, you certainly don’t get the speed of sale, and also I believe that the format they are adopting is very geared towards the purchaser.

“I also think their fees are unsustainable frankly. They have a minimum charge of £5,000 at least, and that sounds great if you are a vendor and you don’t want to spend any money on the sale of your property, but it’s not working in the best interest of your vendor.

“What a lot of buyers do is they just deduct the amount of money they are going to be paying to the auctioneer from the amount of money they are prepared to offer on the property. So the vendor does not, in effect, get the best price for the property in my view.”

Prior believes the MMoA model is flawed. “With the system they are operating, they have to charge high fees purely because if they don’t, their model becomes unsustainable, because they have to take a share of the fee and the agent has to take a share of the fee.

“I think they forget who they are working for; I think they take a somewhat short-term view of it. What they don’t appreciate is that today’s buyer becomes tomorrow’s seller. And if they do a deal with a buyer who is unhappy about the amount of money they have to pay to the agent, they are not likely to come back.”

Livestreamed auctions

Auction House has moved from almost entirely in-room auctions pre-Covid, to livestreamed events today; Prior is not a fan of the eBay format. “At a live auction you do get the best price for a property because you are in a very competitive environment where you do tend to get extremely good prices, whereas with an online digital auction you don’t necessarily get the best price, I don’t think.”

Meanwhile Neil McDonald, CEO of Town & Country Property Auctions, also believes that the traditional auction method brings security for the buyer. “We’re not knocking anybody else’s model, but we are more comfortable being able to give the certainty to the client of a legal exchange straight away.”

Like others, Town & Country has abandoned in-room auctions in favour of an eBay-style listing format. Like most such formats, it includes an anti-sniping tool that automatically extends the auction if someone bids in the last few seconds.

We’re not knocking anybody else’s model, but we are more comfortable being able to give the certainty to the client of a legal exchange straight away. Neil McDonald, Town & Country.

“MMoA works for some agents,” he notes. “But I don’t necessarily think it provides the service that I would like to provide for vendors or buyers, because there is no legal remit there. If you are putting down a reservation fee and you have this 28-day cooling-off period, I’m not sure how comfortable I am with that.

“I think if there is any buyer’s fee involved there has to be some kind of definitive time period and immediate exchange to give clarity to both sides.”

McDonald says he looked into the MMoA seven or eight years ago and tried it a few times, but I didn’t like it. “I didn’t feel comfortable with it,” he says. “There were circumstances that I came across where it was very difficult to establish why the buyer pulled out. It depends very much on the contract. If you’re going to do it you need to protect both parties so they know exactly what they are getting into.” He emphasises that the traditional auction is a secure sale. “I can’t see how the MMoA can offer the same.”

However, McDonald does agree that one advantage of MMoA is the extended period that buyers have in which to complete. “Watch this space!” he adds.

Perhaps the last word belongs with Jeremy Prior at Auction House UK: “We sold over £605m worth of property in 2021 and we’re on target to sell £700m this year. That is an enormous amount of property.

“There is a real appetite out there from both vendors and buyers to buy through the auction process because they are fed up to the back teeth with sales falling through.”

THE TECH ENABLER OF ONLINE AUCTIONS

Bamboo isn’t an auctioneer – but peer behind many estate agents’ auction listings and you will find the Bamboo engine at work. It’s a white-label auction tool that allows agents to customise a remarkably wide choice of auction requirements – ranging from a traditional unconditional auction to the Modern Method of Auction (MMoA). It uses a listing format – but don’t dare call it ‘eBay style’.

“I don’t like calling it an eBay-style auction because it’s not,” emphasises founder Robin Rathore. “You’re comparing apples and pears. With Bamboo you have time extensions, you go through a much more rigorous process in terms of signing up and going through IP checks and putting your payment details in, and that’s just not what happens on eBay.”

We are opening up and tapping a demographic of buyers that hasn’t had access to auctions.

He says the listing-style format appeals to a more cautious type of buyer, who might be deterred by the cut-and-thrust of a livestream auction.

“Almost 50 per cent of our bidders and buyers are women,” he points out. “That has remained true since we started. We are opening up and tapping a demographic of buyers that hasn’t really ever had access to auctions before.”

Rathore explains that agents have complete control over how they use the Bamboo technology. “They can choose to sell by conditional auction, by traditional auction, they can choose the length of time to sell – some at three-minute intervals from a list, some on a property-by-property basis. It’s all done from within their own website with their own branding. They don’t lose control over their vendor relationship, and the service and brand that they are building.”

As from 1 October, agents will also be able to pull and push data from Reapit – whether or not they have a Bamboo login. “You might not have a contract with Bamboo but you will still be able to push your property in the Bamboo network and it will be displayed in the Bamboo marketplace. It’s a pay-as-you-go model where you can list properties for sale by online auction without having the tie-ins of a contract.”

The property will appear on the Bamboo site and the agent will be able to advertise it on Rightmove and Zoopla in the normal way. Rathore believes the MMoA is a good method of sale. “There are more benefits than disadvantages. It does, without question, bring speed, certainty and transparency to the sales process, which is desperately needed, but like anything it is only as effective and as reputable as the agent that is using it, and therefore for that reason we would encourage our agents not charge extortionate fees.” He says agents can determine strictness or leniency of the reservation fee and refund policy. “Some agents may feel uncomfortable about keeping the reservation fee where the property falls through, some agents are more strict about it.”

Bamboo has a standard set of terms used by 90 per cent of agents. The buyer has to pay the full reservation fee at the point the auction ends and they then have 20 working days to exchange unless otherwise agreed.

The post The evolution of auction appeared first on The Negotiator.

If the pandemic has taught us anything, it’s that the future of property auctions is digital. From live-streamed auctions to online viewings and bidding, the industry has been dragged into the 21^st century and online auctions are here to stay.

What are online auctions?

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

Live-streamed auctions are most like a traditional in-room auction (sometimes they are hybrid auctions taking place both in-room and online). The auctioneer is filmed auctioning the lots and the video feed is shared online. Buyers can bid in room (if applicable), on the phone, by proxy or using online bidding software.

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

What are the benefits of livestreamed/online auctions?

There are two major benefits to online auctions. Convenience and accessibility.

Before 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.

Whilst bidding by phone and proxy are an alternative solution to attending in person, bidding online offers complete control for the buyer.

Today’s consumer craves efficiency and demands quick processes and instant results. Online auctions offer this in abundance.

Are in-room auctions redundant?

Nothing quite compares to the thrill of an in-room auction. For the auction customer of today, in-room 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 drawn more to a digital experience.

The pandemic taught us that we don’t need in-room auctions to successfully auction properties. The only element missing from an online auction currently, is the atmosphere from an in-room event. However, as technology advances and is embraced by the industry, it’s likely that in the future, the online auction experience will rival an in-room auction atmosphere and in-room auctions could conceivably be a thing of the past.

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

For more on how to sell property via auction online, click here.

The post BLOG: Are online auctions the future? appeared first on The Negotiator.

The somewhat forced move from physical to online auction events has been instrumental in blowing the auction market wide open. Coupled with the buying frenzy that ensued once the market re-opened and the Stamp Duty Holiday was announced, it’s now a sophisticated sale model being used by all kinds of buyers, a growing number of sellers and thousands of agents on a much more regular basis.

So much so, that properties sold at auction during the past 24 months has increased 40 per cent, with those supplied by agents reportedly doubling. Auctions are no longer just seen as a vehicle for cash investors to buy rundown or problem properties below market value. With stock levels at an all-time low and some 30 buyers for every residential property available, consumers are looking for speed and certainty in their property hunt. And agents, helped along nicely by the increasing uptake of the ‘Modern Method of Auction’ (MMoA), have been driven by this consumer demand along with the need to differentiate themselves from competitors.

Benefits of property auctions

The benefits for all involved seem endless too. Sellers and buyers can significantly increase their chances of success, with fall-through rates dropping to under one in 10 compared to a third via the traditional estate agent model. Competitive bidding in the current market means properties are likely to sell for a similar figure to that achieved on the open market too – if not more – and in less than half the time.

For agents, auction options add yet another service to their portfolio, can generate the same or even higher fees and improve cashflow. And of course, auction providers can access an even wider audience. Those estate agents yet to explore the option to add an auction service to their arsenal should certainly consider the ever-increasing opportunities. Whether you’re looking to dip your toe in the water, need a flexible alternative or a permanent partnership, the choice is yours.

Agent referrals rife

Referring a property to a traditional auction house is a simple and straightforward process in most cases. Usually reserved for ‘typical’ problem properties or those that may not garner much interest on the open market, live auctions offer a quick ‘get-out-of- jail-but-still-earn-a-fee’ card for agents.

As Bryan Baxter, Director of Auction House East Anglia, explains, “We take instructions from agents either at the point of valuation when the agent realises that the property would be best sold at auction or after they have been marketing for a while and the property has failed to sell due to various reasons, e.g. when there is an adverse survey or the vendor is getting anxious for a quick unencumbered sale.”

Selling a run-down property via an auction takes all stress and time commitment away from an agent… no viewings, negotiating offers, surveys, legal issues… Bryan Baxter MD, Auction House UK.

Across the whole of Auction House UK, around a quarter of lots are from introducer agents, rising to a third in East Anglia. In such cases, fees are shared equally with agents. These may be more than the standard agent fee, but the seller can almost guarantee a fast sale and the entire transaction is handled by Auction House.

“Selling a run-down property via an auction takes all stress and time commitment away from an agent,” adds Baxter. “There would be no viewings, negotiating offers, sales chasing, surveys, legal issues, renegotiating or abortive sales and the fee is paid on exchange of contracts ensuring a far quicker cash flow.”

Neil McDonald, Director of Town & Country Auctions, which also has a traditional sales and lettings arm, offers similar agent partnerships for around 200 property sales a year. “We only with partner with agents who provide auction stock that we believe has a very good chance of selling and achieve a 90 per cent success rate as a result,” says McDonald. “Fees are higher for agents and there is more certainty in sale. Some properties are also likely to sell for a higher price at auction than private treaty.”

We only with partner with agents who provide auction stock that we believe has a very good chance of selling and achieve a 90 per cent success rate.
Neil McDonald, Town & Country Auctions.

Both companies credit the change in public perception as one of the reasons behind more agents looking to utilise auctions and both also offer agents franchise opportunities – white-labelled with Town & Country or under the Auction House brand.

Kal Sangra, Director and Auctioneer at Shonki Brothers agrees. “Sellers and buyers have become more knowledgeable about auctions and therefore all types of properties, in any condition, are suitable for auction.”

The Leicester-based independent agent set up its own auction arm in 1992 and remains one of the only local auction houses in the area. Since 2020, the firm has sold 100 per cent of the properties they have received joint agency instruction on in addition to the lots they receive vendor instruction on – around 150 a year.

If we increased our fee to provide incentives to estate agents, it goes without saying that these fees will be chargeable to someone in the chain, most likely the buyer.
Kal Sangra Director, Shonki Brothers.

Sangra, says, “Agents, both commercial and residential, normally approach us as a last resort to selling a client’s property. Despite an estate agent being already involved, a full auction service is provided with a valuation being conducted.”

In respect of fees, Shonki Brothers charge the seller a joint agency fee of 1.5 per cent to two per cent of the sale price compared to its usual one per cent to 1.5 per cent, which is split equally with the agent. “We do not achieve as much but receiving instructions and sharing equally the fee is not something we worry about,” comments Sangra. “It is always an honour to work with a fellow professional in getting a property sold.”

Although Sangra is aware that other auction houses charge higher fees, with the bill usually footed by the buyer, he claims this only impacts the final sale price. He adds: “If we increased our fee to provide incentives to estate agents, it goes without saying that these fees will be chargeable to someone in the chain, most likely the buyer. The higher the fees, the more likely buyers will offer less for the property.”

This is also the perspective of Pugh Auctions, as Associate Director, Will Thompson, explains, “There is a lot of talk about the fees that agents can earn from working with an auction house; that’s understandable because the fees are indeed attractive but, in my experience, agents are primarily concerned with vetting the process and the service their clients will be involved in. “Whether it’s a long-term strategic partnership or just an occasional joint-agency sale, most of the time, the agents want to know if an auction house can be trusted to deliver results, which I think is great!” Pugh Auctions doesn’t require agents to sign an exclusivity agreement, instead working alongside them to understand the needs, which can be different for each property and each agent.

Whether it’s a long-term partnership or just an occasional joint-agency sale, the agents want to know if an auction house can be trusted to deliver results.
Will Thompson, Pugh Auctions.

Thompson adds, “Personally, I think this is very enticing to agents because it allows them to feel they can come and go if they wish, rather than feel an expectation to refer a minimum number of properties to us. Plus, having a standard agreement for agents to sign is not the approach we want to have. You only need to converse with a handful of agents to understand a one-size-fits- all policy won’t work. We let the agent do the talking to understand how the auction service, process and partnership needs to work for them and their clients.”

Taking regular auction action

In an increasing number of cases, as alluded to above, agents also have the option to form a more formal and regular partnership with auction providers in the shape of a franchise or serviced auction arm.

The former would include the usual franchise set-up costs and ongoing fees but with a likely higher margin on fees earned from the sale. The latter has a variety of operating models which could include subscription fees and/or a split on the commission.

As well as flexible options with Town & Country Property Auctions, Auction House UK and Pugh Auctions, some other major players who have capitalised particularly on the MMoA movement are Iamsold, Whoobid and My Auction.

Offering agents more of a middle ground, this model extends the completion time from 28 days to 56 days post-auction. This gives buyers more time to finalise finance or other arrangements and therefore entices a bigger pool of buyers and attracts a range of properties.

As Jamie Cooke, Managing Director of Iamproperty, puts it: “Thankfully, auction no longer conjures up images of abandoned buildings being sold in a ‘Homes Under the Hammer’ ballroom.” As one of the companies which has pioneered MMoA, Iamproperty’s auction service, iamsold, welcomed 495 new partner agents and sold 5,023 properties through the network in 2021. This is an increase of 29 per cent on the previous year, with over £17m in fees being paid out to partner agents, often within as little as seven days, and with at a successful sale rate of 95 per cent.

Typically, estate agents come to us when they are looking to enhance their service offering, meet the demands of their clients and win more instructions.
Jamie Cooke MD, Iamproperty.

The decision to provide an auction offering is a business one that benefits both agents and sellers says Cooke. “Typically, estate agents come to us when they are looking to enhance their service offering, meet the demands of their clients and win more instructions,” he comments. “In times when it’s more difficult to win instructions, offering MMoA is a strong differentiator that helps agents to gain a competitive edge.”

Cooke adds, “In addition to being able to stand out in the market and offer clients more options to match their individual circumstances, auction gives our Partner Agents additional revenue streams and the opportunity to complete sales faster.

“MMoA alleviates the pressure on them and their workload, while still delivering the results and income that they need to satisfy clients and reach targets.”

Iamsold does more than just facilitate an auction service and nurtures a close relationship with every agent branch, giving them access to an account management team, training and a learning portal.

From a seller perspective, Cooke claims they get the best of both worlds, “Their transaction is supported by our auction expertise and regular communications from their dedicated auction specialist, as well as benefitting from their chosen estate agent’s local knowledge to get a personalised service that feels seamless.”

With this type of model, sellers usually pay for an auction pack with the commission being charged to the buyer – 4.2 per cent of the property price or a minimum in £6,000 in this case – meaning agents can sometimes be earning double.

Another online auction provider is Whoobid and they don’t charge sellers commission either, also putting all the fee onus on the buyer and giving agents a majority split of 60 per cent.

It could be argued that this reduces the number of potential buyers to serious and experienced ones, but Director, Doug Haigh, says that the certainty is driving demand.

“We’ve seen a significant shift in the perception of auctions change,” comments Haigh. “Three years ago we would be regularly having a ‘my property isn’t suitable’ conversation but now we regularly sell penthouses, high end detached properties and well as the expected dilapidated properties and HMO’s etc. We find now people are looking for security due to being messed around or chains falling through.”

A newer player to this arena, although by no means new to the property market, is Stuart Collar-Brown. The former estate agent and auctioneer of 13 years and NAVA Propertymark board member launched My Auction two years ago with a view to providing a ‘fresh approach to online auctions’.

Since then, over three quarters of the successful auction sales have been referred to them via estate agents who all earn their full fee.

Collar-Brown comments: “Our intention is to create a very fair and equal relationship with the estate agent utilising each company’s strengths and skills to maximise the sale price for the seller.”

“The decision to put a property into auction from an estate agent’s point of view should be because it’s the best advice for the client – not because of the fees they will earn,” he adds. “We believe the agent should earn the same regardless of how the property is sold and likewise, it should not cost the seller any more to sell via auction than it does to sell on the open market.”

My Auction is structured in a way that requires the agent to do their usual marketing and viewings for the four weeks prior to auction while the company carries out specific auction marketing before facilitating the whole sale using its own software and website. The agent keeps 100 per cent of their usual fee and My Auction charges one per cent plus VAT to buyers, with a minimum fee of £2,000.

The timeframe from going live to legal completion should be no more than eight weeks, following the traditional model of exchange on the day of auction.

“I am a traditionalist when it comes to auction,” says Collar-Brown. “With that said, I can’t deny that the introduction of the modern method of auction has increased the number of what I would call ‘normal houses’ being sold at auction – this is a good thing for the industry if done fairly for all parties.”

Investing in tech

One way to start testing the water is to use a free service like Bamboo, which only charges agents on their sale success. Its online technology makes the agent the auctioneer, integrating into an agent’s website. Agent training is provided, but essentially, they retain complete control and responsibility of the whole process and fee structure. Over 1,000 properties have been sold using this platform in the last 12 months, raising £230m in sales and with a fall-through rate below one per cent.

According to Robin Rathore, the company’s founder and director, Covid has certainly proved a catalyst in growing the online auction market. “We have noticed a domino effect in the world of proptech with agents adopting new technologies and services as part of their everyday business uses and this, in turn, has created a new market for agent adoption to new and evolving technologies such as Bamboo Auctions,” says Rathore.

We have noticed a domino effect in the world of proptech with agents adopting new technologies and services as part of their everyday business.
Robin Rathore Founder, Bamboo.

“According to our latest research, we have seen an increase in the last six months of agents joining Bamboo increase by 40 per cent month on month.”

The very nature of online auctions and changing buying habits of consumers has also impacted the demographics of buyers and sellers as well as property types, claims Rathore. “We have seen an increase in the number of younger buyers and first-time bidders in the residential sector and approximately 50 per cent of bidders on our platform are women.

“It’s not just young people who are bidding on our platform either – for the last two years, older bidders have had to adopt ‘new’ technologies, and the convenience of being able to bid online has created new advocates for the online auction space.”

As a result, the expected fixer-uppers and development opportunities are now up for auction alongside an increasing number of owner-occupied properties, which are being bought by first-time auction buyers.

Offr also powers online auctions at the press of a button on agent websites. The proptech firm, which claims to have facilitated the first digital property transaction in March 2020, charges a monthly licence fee with no upfront set up costs and a 0.1 per cent transaction fee on the completion of sale.

Co-Founder and CCO, Philip Farrell, sums up the service: “The agent provides the expertise, market knowledge, and access to a bank of active purchasers. We deliver a button which sits on the individual property details on their website, in their colours. With this button, they conduct an online auction in a secure, user-friendly environment. To date, Offr has sold over 500 properties by unconditional auction for agents and many hundreds more via the conditional sale method.”

We deliver a button which sits on the individual property details on their website, in their colours. With this button, they conduct an online auction.
Philip Farrell Co-Founder, Offr.

Like Offr, Under the Hammer aims to save agents a considerable amount of time by combining auctions and automation and maximises success rates by offering an eight-week completion.

“A property which allows a buyer 28 days to complete limits its audience, hence suiting to problematic properties and cash buyers,” says Group CEO, Indy Dubb. “However, the Under the Hammer platform allows agents to offer eight-week completions, which targets almost every possible buyer. Not only that, but we also have a heavy focus around technology and automation, and as a result, agents who are using our platform are saving up to 80 per cent of their time when compared to Private Treaty.”

When we look at the definition of ‘auction’ it is in fact ‘to find the highest bidder for any goods or property’. And that’s what a lot of agents are doing right now.
Indy Dubb CEO, Under The Hammer Group.

Under the Hammer is a 24/7 digital service supported by a team who take care of everything from arranging viewings, collecting offers and AMLs and sales progression, when needed. Agents will receive a five per cent deposit from the buyer on the day and a fixed timescale for completion.

Dubb continues; “Agents are loving the fact they can win more instructions by offering so much more value to their clients. Let’s not forget, we are probably the only industry that doesn’t get paid or part paid for anything until it gets over the line, however by agents using our platform, they are being paid on every sale. With uncertain market conditions for buyers too, they also want to know that they are agreeing to purchase a property that is theirs and they have that security.”

No ‘one-size-fits all’

The mainstream movement of auctions cannot be denied and even some of the largest portals now have an auction functionality, putting bidding buttons in the direct eyeline of buyers. So it’s not so much a question of if agents should embrace auctions, but when and in what format. There are clearly plenty of options and which one you consider will largely depend on: the goals of you as an individual and property professional; your branch and its service offering; and, of course, your vendor.

With Google Trend data indicating that online consumer search interest in ‘Modern Method of Auction’ has soared 130 per cent since January 2019, we can be confident that enquiries will rise. But will agents be ready to effectively operate in what is notoriously a complex arena?

One issue that My Auction’s Stuart Collar-Brown foresees is that a lack of regulation and specialist training could lead to costly mistakes. “I would like to see our industry become regulated the same as the financial and insurance professions,” says Collar-Brown. “This means no estate agent can give advice on property auctions unless they have the relevant qualification in auctioneering, or work with an auction house where all of their staff hold the relevant qualifications from a professional body. This would increase the profile and reputation of the property industry as a whole.”

The modern method of auction has increased the number of what I would call ‘normal houses’ being sold at auction– this is a good thing for the industry.
Stuart Collar-Brown Founder, My Auction.

Having said that, the activity in both sectors of the market have many similarities already, as Under the Hammer’s Indy Dubb explains: “When we look at the definition of ‘auction’ it is in fact ‘to find the highest bidder for any goods or property’. And that’s what a lot of agents are doing right now given the current market conditions, as the majority of sales are going to be best and final, but without providing the security and with no guarantee the sale will actually go through to completion.”

It’s now a case of formalising this process, getting the right training and education or partnering with an auction provider who can not only boost your service but your bottom line too.

AGENT AUCTION OPTIONS QUICK GUIDE

1 Introduce

Refer properties on a case-by-case basis, hand over the ‘hassle’ and share the fee.

2 Partner

Commit internally to adding auction services to your arsenal and strike up agreements with auction providers on an ongoing basis, combining your expertise and sharing the fee and the workload.

3 Franchise and Expansion

Piggyback on tried and trusted brands in the sector with the infrastructure behind it whilst still offering traditional Private Treaty sales and retain the majority of your fees.

4 Tech

Educate yourself on the auction process and integrate tech to your existing online offering to facilitate this sale method and achieve a higher margin, but potentially trade more time for money.

The post How to sell a lot appeared first on The Negotiator.

Within our individual organisations, we all know we can achieve much more when we work together in partnership and allow people to play to their strengths.

At SDL Property Auctions, we have taken steps to keep our people working together effectively as teams throughout the pandemic. One of the risks of working remotely is that this can create a silo mentality; where individuals begin to operate within their own little bubbles, failing to collaborate and share. This is not always intentional but can be an unfortunate side effect of working from home which can all too easily become a habit.

We know silo working is not the path to success so during the pandemic have encouraged our people to collaborate as much as ever, not only to keep the wheels of our business turning but to counteract feelings of isolation. We know we are not unique in this; many businesses took the same approach. Because everyone was thrust into the same boat during lockdown, I believe there was a stronger-than-usual drive to foster teamwork among people working from home.

Collaborating outside of your own business

The advantages of working as a team within an organisation are well known. However, these benefits are not limited to individual staff members and departments within a particular company. This same strategy of collaboration can – and in my opinion should – extend beyond the walls of our businesses. If we are stronger working together within an organisation, we can also be stronger together when collaborating with other companies – even those which we may have traditionally seen as our rivals.

A great example of this is the way we at SDL Property Auctions work in partnership with estate agents around the country.

Previously, when selling a property, people had a clear choice between a private treaty sale or an auction. When considering an auction sale, they had to turn their backs on their local estate agents. For sellers, this meant a rejection of the familiar and a leap into the unknown. For auctioneers and estate agents, it created a level of competition for instructions and an informal division of properties for sale. The smart family homes generally went to the estate agents, while the doer-uppers or ‘challenging’ properties usually went to auction, reinforcing the view that auctions were just for a certain property type.

I’m happy to say that this division of properties has been significantly blurred in recent years. As auction methods have evolved for the 21st century, to encompass modern methods such as Timed Auctions and Buy It Now sales, we have seen a growing number of smart family homes being offered for sale by auction. The pandemic has hastened this evolution; when estate agents were forced to close in March 2020, many homeowners turned to auction to sell their smart family homes and discovered they could do so quickly and easily, with a fixed completion date and no hassle.

Not an either-or situation

Best of all, people learned they can choose an auction sale without turning their backs on their familiar high street estate agent.

This is because an increasing number of estate agents no longer work as silos, operating in bubbles competing for the same properties as auctioneers. Agents can instead refer properties to auction without losing the sale; we can sell properties for them under their own branding and even create a bespoke auction website for them to display their properties.

This gives the agent an extra sales route to offer to their customers, costs them nothing and can create a healthy income for their branch. One of our partner agents earned £10,000 in a month from just three auction sales – and this income is paid within just seven days of a sale being agreed.

It’s not just income for the branch; the referring agent receives personal rewards, too, from hampers to holidays; a perk our partner agents tell us they love.

Our partnerships with estate agents mean everyone is a winner. As well as the benefits for the branch and individual agent, sellers are happy because they get a quick, hassle-free sale for their property while working with their familiar estate agent – and they’ll be more than happy to spread the word about their great result.

Naturally, we benefit from the extra instructions, too – that’s how partnerships work – and they are now the fastest-growing area of our business. We now work with more than 1,500 estate agents across the country and see them as an extension of our own auctions team.

When we work together, everyone wins. And by working together in partnership, we all become stronger for it.

Read more from Andrew Parker.

The post How the rise in partnership working is breaking down business silos appeared first on The Negotiator.

Demand for property is at its highest for years; the latest RICS Residential Market Survey reports that demand has not outstripped supply to this level since November 2013. With new listings in short supply many buyers are willing to stretch their budgets to secure their dream home.

At SDL Property Auctions we speak to estate agents all the time and many tell us that some properties attract so much interest that they feel the need to limit viewings and request sealed bids or best and final offers. Demand is particularly high for rural family homes, as the pandemic has motivated many people to reassess their priorities, crave more green space and add a home office to their list of must-haves.

Buyers at this end of the market are generally in a stronger position to offer more than the asking price and sellers know this. They also know that sealed bids can send offers soaring. Rightmove’s June House Price Index reports that prices of properties in this sector have risen by an average of £67,394 since March 2020, an increase of 12.3 per cent compared to 7.5 per cent for all properties.

What are sealed bids?

Sealed bids are effectively a blind auction; nobody knows how much anyone else has offered, so buyers could end up spending more than they need to. While this seems like great news for agents and sellers, equally it could represent a missed opportunity if a potential buyer plays it safe because they didn’t realise an extra £1,000 or £2,000 would have done the job.

Andrew Parker, MD and Auctioneer, SDL Auctions

Plus, as in any private treaty sale, there’s no real commitment from the buyer – and if they pull out of the purchase, that best and final offer may not actually be the best one after all.

At SDL Property Auctions we are strong advocates for transparency and believe the fairest and most effective solution is to open up the bidding. We currently work with more than 1,500 estate agents around the country to do this through auctions, helping to generate income for their branches and secure great results for their customers.

Buyers and sellers enjoy all the benefits of competitive bidding but it is fully transparent, with bids clearly displayed on the property listing. This transparency draws in more bidders, and more bidders means a greater chance of the price being driven up.

Our auction bidding process can also reduce the fear factor for sellers. Buying or selling a house by private treaty is fraught with uncertainty, with longer chains increasing the risks of a fall-through as all estate agents are only too aware. No seller wants to ride the emotional rollercoaster of accepting a generous offer, only to have it fall through months down the line because the chain has broken somewhere along the way.

Reducing fall-through risk

In an auction the risk of the sale falling through is reduced to less than 1 per cent because bidders are fully committed to the purchase. And buyers cannot be gazumped as the seller is legally committed to their offer and nobody else’s. This is achieved by the buyer paying a reservation fee, which grants them a period of exclusivity, during which the buyer may not sell to anyone else. This also gives the buyer the option of paying no selling fees – a big incentive for many.

To everyone’s relief, there’s no long drawn-out process either; completion is within a fixed time frame; usually 40 working days, giving the buyer the flexibility to arrange their finance. It’s a myth that you can’t buy an auction property with a mortgage – plenty of people do.

Estate agents enjoy all the benefits of transparency, speed and certainty, too… with one huge extra plus. They get paid just seven days after the sale is agreed. Auctions generate a higher fee for their branch and they receive personal benefits, too, in the form of shopping vouchers for every referral that results in a sale.

By working closely with estate agents we are helping to dispel the many myths about auctions. Auctions often conjure up images of cheap, run-down properties snapped up by cash buyers but this is a view which has become very outdated. These days an auction property could just as easily be a modern family home or a beautifully styled country cottage.

Auction properties are as diverse as the buyers and sellers themselves; what they all have in common is that they are all sold securely within a fixed timeframe, with fully transparent bidding – and no hassle for anyone.

The post Don’t seal your bids… open them appeared first on The Negotiator.

The events of the past year have changed the way many of us live, work and shop, which has had an inevitable impact on businesses on our high streets, commercial property and beyond.

As a result, at SDL Property Auctions we are seeing an increase in commercial units coming to the market. This is something we predicted earlier this year, partly due to the looming end to the business rates holiday, which has been extended to the end of June.

While some of these properties are being sold because, sadly, the business has folded, others are offices which are no longer required now that staff are working fully or partially from home. The company may still be operational but require smaller premises for a reduced or hot-desking workforce.

Andrew Parker, MD and Auctioneer, SDL Auctions

Many of our estate agent partners have told us that they, too, are being approached by sellers of commercial properties. I think most residential estate agents would agree that the commercial property market is new territory for them but after such a challenging year they don’t feel they are in a strong enough position to turn away any business… even if the office, retail unit or warehouse they are being asked to sell is not a comfortable fit with the rest of their stock.

Marketing such a property as a residential estate agent can present its own challenges, too, as most branches will have a database of house-hunters looking for their next home, so will have to work doubly hard to reach those interested in investing in a commercial property.

Despite these potential hurdles, the current surge in commercial properties being offered for sale still represents an exciting opportunity for agents. An approach from a commercial property seller is the ideal time for an estate agent to branch out into auctions. Instead of turning away the business, or accepting an instruction which may be inconsistent with the rest of the properties on the agent’s books, they can refer the instruction to us without losing the sale.

The perfect fit

Unfortunately, many people still believe that auctions are only there as a last resort, so will be keen to try the open market route first, even if their property is a perfect fit for an auction. While we can and often do step in to help people get their property sold after they have tried the open market route, achieving secure and faff-free sales for sellers in a matter of weeks or even days, a much quicker result could be achieved for certain properties – and commercial properties are prime examples of this – if the seller had chosen an auction sale from the start.

This ‘last resort’ myth is one which we at SDL Property Auctions are very keen to dispel – and a growing number of sellers are realising that they can cut out a great deal of hassle if they come to us in the first instance.

Auction sales are increasing in popularity because they can be achieved through a regular high-street estate agent. This is particularly rewarding because it means we don’t have to work in competition with agents but can work together.

Everyone benefits. The customer gets a fast, secure sale with the option of no selling fees and almost no risk of a fall-through – our fall-through rates are less than 1% – and the estate agent generates an additional income stream for their branch, receiving payment within days of the sale being agreed instead of months later as they would in a private treaty sale.

With the current rush of commercial property enquiries, there’s no better time for estate agents to diversify into auction sales.”

Some 1,400 estate agents around the country now partner with us in this way to sell properties by auction. We help them to identify which properties would benefit most from an auction sale – and most commercial properties would automatically fall into that category. Once an agent has identified a lead, all they have to do is refer it to us and we do all the work.

Properties can be sold in daily Timed Auctions, in our monthly National Property Auctions and in Buy It Now sales with a fixed price; we help the seller decide which route is best for their circumstances. Whichever method the seller chooses, they benefit from a fast, secure transaction, with completion taking place either 20 or 40 working days after the sale is agreed.

Selling just a few properties by auction each month can significantly boost an estate agency’s income, with no financial outlay or risk. And with the current rush of commercial property enquiries, there’s no better time for estate agents to diversify into auction sales.

The post How estate agents can capitalise on commercial property sales appeared first on The Negotiator.

As managing director of a company which maximises its use of technology to offer a fully remote buying and selling experience, I may surprise you by being a strong defender of human interaction.

Clearly, technology has come into its own during the coronavirus crisis and at SDL Property Auctions we have not only embraced this but are carrying some of our innovations into the post-pandemic world.

But although the pandemic may have given us new respect for 21st Century methods of communication, it has equally strengthened our appreciation for human contact. For example, while video calls have undoubtedly been the big technology hero of the pandemic, both for work and leisure, their popularity has been driven by the very human need to see a friendly face.

Remote transactions have been popular with investors for many years and during the pandemic we have adapted our business practices to enhance these. From expert desktop valuations to virtual viewings and remote bidding, the whole buying and selling process can now be done from a distance, without diluting the experience.

But as remote sales and purchases have been embraced by private homeowners during the pandemic – and look set to remain popular as society opens up again – it has become clear they must go hand in hand with personal customer service to help those new to auctions navigate an unfamiliar process. Most of us will happily order books, phones and clothes from faceless online stores but when it comes to major investments such as property, nothing can replace speaking to a real person with a wealth of knowledge and experience.

This is why we’ll always make time for a chat. We appreciate people often feel more comfortable asking questions on the phone or in person than in an email.

When it comes to major investments such as property, nothing can replace speaking to a real person with a wealth of knowledge and experience.”

The same is true when building relationships with estate agents, who have been instrumental to the growth in popularity of auctions among private homeowners.

Through our estate agent partnerships, we have shown we don’t need to compete with each other but can work together to benefit everyone. Homeowners can choose a quick, transparent and secure auction sale, with a fall-through rate of almost zero, and the agent gets paid within days. Everyone wins and auctions provide the certainty we all crave in such an uncertain world.

Once again, technology makes this possible – in this case allowing us to create bespoke auction websites for our agent partners – but it is the human relationships which make the partnerships happen.

Building a strong relationship with estate agents – as well as buyers and sellers – is not something which can always be achieved over email. Although email remains essential for providing a trail of communication and enabling the transfer of documentation, sometimes there is no substitute for a friendly chat on the phone.

We also remain committed to providing our sellers and estate agent partners with options when it comes to selling a property. There has been a huge growth in popularity of our Timed Auctions with 24-hour online bidding and these are supported by a friendly voice on the end of a phone when required.

Equally, we know there will always be people who are reassured by the presence of a live auctioneer on the rostrum so we continue to run monthly live Auction Events to provide an experience as close to an in-person event as possible. Viewers can watch the auctioneer in action on their computer screens and, although we cannot see bidders’ faces from our head office auction studio, we can see how many there are and who is bidding. By watching these closely, we can slow down to ensure nobody gets left behind. Technology makes the auction possible – but it is this human intervention which enriches the experience.

Online bidding is not for everyone; some people are uncomfortable with technology or have an unreliable internet connection. Because we don’t want anyone to feel excluded, we offer proxy and phone bidding, too. Speaking to one of our team on the phone enables buyers to keep up with the pace of the bidding comfortably and of course provides that all-important human interaction.

As we take tentative steps out of pandemic restrictions, it is clear ‘normal life’ won’t look quite the same as before. But I don’t think we need to worry about being replaced by robots and I remain optimistic about the future of the property industry. At SDL Property Auctions we have always believed the old adage that “people buy from people not businesses” and no matter how much we rely on technology, it won’t replace human beings, just enhance our capabilities.

Andrew Parker is Managing Director and Auctioneer at SDL Property Auctions.

The post Why technology will never replace human interaction appeared first on The Negotiator.