Life is always evolving, changing, morphing – particularly during times of crisis. And we are indeed faced with a crisis unlike anything we have known in our lifetime. So we adapt. We find ways to keep working as ‘normally’ as possible and continue to live our lives in the most positive way we can. We move forward and keep striving to achieve our dreams.
Our real estate goals continue to drive the market. Families still want to move to areas more suited to their lifestyle, they want to upsize or downsize according what stage they are at. Investors look for hotspots where they can capitalise on opportunities and those living in metropolitan areas seek out holiday homes to escape to.
Ensuring that this real estate world keeps turning has meant that real estate agents have had to adopt new and innovative ways of communicating with Vendors and buyers. COVID rules and regulations surrounding physical distancing have required that home inspections be contactless and/or virtual. The process of any property sale has also required that documentation be signed and transacted via contactless platforms like DocuSign.
Viewing properties online has of course been part of our every day for many years now, so we are all familiar with searching and researching via real estate platforms and localised websites. Videos have allowed us to inspect a property and do virtual tours from the comfort of our own home.
The next stage in this evolution of the real estate market is the online auction. An online auction system is different from bidding for a home in person through a real estate agent or buyer’s representative. Instead live bidding is conducted online. It's all electronic.
An online real estate auction is a natural and intuitive solution for buyers and sellers. Buyers are already comfortable conducting their property research and due diligence online, so an online transaction makes sense. It’s a secure, fully compliant process that enables buyers to bid in an auction wherever they are, meaning increased buyer reach and participation and possibly resulting in better outcomes.
Jellis Craig, who have an extensive real estate network in Victoria, are holding online auctions during this period of Stage 4 restrictions. These online auctions are held via Zoom. It’s simple really – these auctions work in the same way as regular public auctions run with all auction standard rules still applying.
Explains Sam Rigopoulos from Jellis Craig, “We did explore online auctions during the initial Stage 3 restrictions in March when public auctions were first wound back. We needed to create some competitive tension and keep the heat alive in the market. We used an online platform initially called AuctionNow which we had some strong success with. It was a new process for everyone so it took some getting used to particularly because this platform didn’t allow a visual of the interested parties. Whilst buyers could see the auctioneer, they were simply known by bidder numbers. Now during Stage 4 we are using the Zoom platform which provides a two-way visual which is proving more successful.”
Sam advised that last night (August 11) they had an online auction with 26 registered bidders, seven of whom had a go at bidding. “It was a very popular house which will have influenced these results,” says Sam, “but the point is that the online method didn’t dampen the enthusiasm from the market.”
Participants (potential buyers) are required to complete an application form to register to bid for the property via the real estate agent. Once this form has been completed and the agent has approved your application to bid, you receive an invitation with a Zoom link for the online auction (a stable internet connection is important as it is a live process).
During the auction registered bidders are invited to log into the Zoom link prior to the auction time so that everyone involved is online at the start of the auction. The process runs in the same way as any public auction, whereby the auctioneer runs through the REIV auction rules and introduces the property.
It is important to note that during the auction all interested parties are asked to remain on ‘mute’ until the auction has commenced (unless you have any questions). This is to ensure there is as little interference from background noise as possible. If you intend on bidding at the auction you are required to turn your camera on to ensure that the auctioneer can see you raise your hand with a bid. (If you do not intend to bid it’s best to turn your camera off to minimise any distractions or disruptions for the auctioneer and bidders).
To make a bid in an online auction you simply need to ensure you are not on mute and speak clearly to announce your bid – or clearly show the auctioneer that you are making a bid by raising your hand. Making yourself heard and/or seen is solely your responsibility. Once a bid is received, the auctioneer will clearly state who the highest bid is sitting with (based on your zoom name).
If you are the highest bidder in an online auction you need to stay on the Zoom call whilst all other parties are removed, so that the next steps can then be completed via a digital contract exchange with the Vendor. You’ll be guided through the process by the real estate agent or Vendor’s representative which will include payment of the deposit.
Whilst Jellis Craig hasn’t seen interstate or international interest in properties at this stage (Sam has conducted ten online auctions so far) it certainly does open opportunities up to a wider audience.
“On a personal level being able to conduct auctions during the week from the comfort of my own home has been a really nice experience. Spending time with family on the weekend and balancing out life whilst still being effective has been very positive.” However Sam doubts online auctions will continue beyond ISO restrictions.
“Being in the inner-city market, Saturday real estate auctions are so ingrained into the culture of Melbourne. It’s like footy, it’s a weekend sport. We see the same faces week after week travelling around to all the auctions to pass the time. Vendors love the street theatre of an auction too. They want their day in the sun on a Saturday with a busy street full of potential buyers with the promise of a positive result. As fun and successful as online auctions have been I think they will remain a plan B for Melbourne.”
Want to know more? Give Sam Danckert a call on 0432 444 040.