A real estate group will launch its first online auction at the end of this month, in the hope of offering their buyers a more convenient buying experience when entering the market.
Rural property specialists Meares and Associates will sell Cooltah, a 695 hectare property outside Dubbo, via a 48-hour online auction on October 29 - and it is expected to sell for $4.5 million.
Chief executive Chris Meares told Real Estate Business the agency had been looking for a means of conducting online auctions for two years.
“About a month ago, I found a platform, Auctions Work Online, that has run some smaller sales quite effectively and I liked the features, which included its absolute transparency and its low stress on marketing,” he said.
Mr Meares said the online auction was a response to the current market conditions, which were soft and not experiencing many transactions.
“When you’ve got fickle markets, people like to know where the bidding is up to. Houses are different; there are lot of houses selling the whole time, so people can get a feel for where the market is up to," he said.
“The same doesn’t really apply in the country because you’ve got larger properties and they’re a little bit more remote.”
As part of the online auction process, buyers will register and have 48 hours to bid on the property, wherever they are based.
“Basically, unlike a traditional auction, they’ve got time so they can follow the bid and follow the sale,” Mr Meares said. “They might get to the final sale and the bidding has got up to $3.8 million and then perhaps say ‘We should get in and have a go’.”
However, unlike sites like eBay, if any buyer puts in a bid in the last five minutes, the auction will be extended by another five minutes.
Mr Meares said his vendors also saw merit in selling their property via an online auction.
“Our vendors like it because they feel it gives the bidders time to react, they feel that it’s transparent, it gives bidders an awareness of where the market is up to, how many bids there’ve been and it’s open for the public,” he said.
Mr Meares said he had no doubt that online auctions would spread to residential property auctions in the future, but it was dependent on market conditions.
“If you’ve got a really active market that’s going well and it’s very strong and vibrant, you still might prefer to sell in an active auction environment rather than an online one," he said.
“I think it depends on the market climate of the time, but I think our rural market today is suited to this type of marketing.”