The technology to facilitate online auctions has been widely available for a number of years, but thanks to COVID restrictions, virtual bidding has entered a new frontier.
With hands tied during the months of restrictions that kept Australians at home, real estate professionals quickly turned to tech to keep auctions going.
At the start of the mass migration, fears of how this would affect overall sale prices abounded but were soon diminished, with bidders proving adaptable and not turned off by the idea of buying their next property during an online event instead of curbside.
But while COVID restrictions mandated that events went ahead as online-only and the industry toggled between that and live events when health orders allowed, many speculated that a virtual option would stick around once restrictions began to lift in a more permanent way.
That moment is arriving, and the question of whether an online component will become the norm in live auctions going forward is on top of everyone’s mind.
For their part, Barry Plant’s head office has decided to ensure all their teams are equipped with the tech to carry out hybrid auctions post-restrictions, noting that some offices had been trialling a hybrid approach pre-pandemic.
According to executive director Mike McCarthy, Barry Plant won’t mandate that franchisees conduct auctions online as well as live but are making sure if they want to, they have access to the tech and support they need.
With many buyers exhibiting a clear comfort level participating online, the payoffs to offering the service were too big to ignore.
“The human interaction model is still very important, but I think adding the streaming model on top of that, with an ability to provide secure bidding and registration of buyers and so on, is also becoming more important because it opens up the market not only to local people who can’t get to an auction but to buyers who are international and can’t physically attend,” Mr McCarthy said.
Phone bidding has, of course, always been an option, but in McCarthy’s view, the new tech emerging provides a more effective and efficient form of participation for those not on site. Still, that doesn’t mean integrating a virtual into auctions is without its drawbacks.
He acknowledges that eliminating body language from the equation is an adjustment for auctioneers.
“When you’re standing face to face with all your potential buyers, you can see immediately what’s happening. You can literally look them in the eye and call for their bids and see their body language. When you’re doing a combination, you’ve got some that you can do that with, but for those who aren’t present, you’ve got to give them time,” he said.
“I think that’s probably the biggest adjustment that the auctioneers have had to make: ensuring that they are giving the online bidders every opportunity to put in a bid, particularly as you’re getting towards the fall of the hammer.”
Daniel McCulloch of McCulloch Agencies has long been navigating this model. Operating in Tamworth and Sydney, the business holds in-room events simultaneously in their two main locations while complementing that with online participation. He’s observed that the breakdown of who turns up to the live event and who is happy to participate online can often tell you something about the type of buyers you’re faced with.
“If someone is busting to buy, if they are genuinely interested in securing a home, you’ll find they don’t want technology to let them down, and they will always be there at the auction,” the managing director commented.
“I think investors are probably different; if they miss it, they miss it. But if somebody is emotionally buying a home to house their family, they’re not going to rely on Telstra signal to ensure their last big bid comes through.”
It’s for that reason that he sees online components, while continuing to be offered, ultimately taking a back seat with live events resuming.
James Pratt, REB’s 2021 auctioneer of the year and the CEO of James Pratt Auctions Group, agreed that while online bidding had been a saviour for the industry during lockdowns, by and large, he’s had more people excited about resuming on-site events than those interested in purely online or hybrid models.
“People are creatures of habit, and the Saturday morning auction is not just about the auction, it’s also a great listing tool for agents and also a great way for a brand to be shown off – 200 people at Bondi Beach live when the property sells is a different scenario than 13 people online.”
But he sees online models appealing to those who have found a lot of success with it over the previous months and have already pivoted their strategy to take advantage of both.
And he noted that with the logistics involved in carrying out a hybrid approach, there’s a reason some agents might hope that exclusively live events will prevail.
“Combining them both together is more work, and especially this time of year with the spring push, the last thing agents want to do in a hot market is to be spending more time coordinating an auction rather than prospecting,” Mr Pratt said.
But even while the hybrid model creates some logistical challenges, and the live event will always be king, industry players do agree that it’ll be part of the equation going forward because there are circumstances in which a hybrid approach can genuinely expand a property’s prospects. In those instances, it’s worth the legwork.
According to Mr Pratt, it’s a matter of strategy. “If it’s a unique property, a property where you know, an open house isn’t ideal, such as a rural property or a property that’s kind of isolated. I think the online factor really helps there.”
ABOUT THE AUTHOR
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.