![\"Online](\"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2020\/08\/Real-estate-blog-in-Nigeria.jpg?resize=300%2C166&ssl=1\")
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In what feels like the blink of eye, buying and selling property via online auctions has gone from future possibility to very real reality.<\/strong><\/p>\n The COVID-19 crisis has prompted the entire real estate<\/a> industry to expedite longer term plans to offer<\/a> such services entirely online and with parts of Australia under strict lockdown, it\u2019s now part and parcel of buying and selling.<\/p>\n We asked some experts to answer the biggest questions around this growing phenomenon.<\/p>\n As the name suggests, an online house auctions is just like a regular \u201cstand in the front yard and bid\u201d auction, but virtual. It\u2019s an auction on the internet.<\/p>\n Michelle May, a Sydney-based property flipper-turned buyers\u2019 agent, said with an online auction, instead of physically standing at the property or auction house and placing bids, it\u2019s done via a phone, laptop or another web-connected device.<\/p>\n \u201cYou can have a live stream auction, where registered bidders go up against each other in real time, or a \u2018genuine time\u2019 online auction, which is comparable to an eBay auction, which has a start and finish time,\u201d she said.<\/p>\n The platforms used and how buyers participate differ, but the fundamentals are the same as a traditional, in-person auction.<\/p>\n An auction sets a timeframe by which a property must be sold, which is normally four weeks.<\/p>\n Ray Ellis, chief executive of First National, said an auction gives interested buyers time to do due diligence on contracts, as well as building and pest inspections, and to get their finances in order, before choosing how much they will bid.<\/p>\n \u201cWhen a property is sold at auction, there is no \u2018cooling-off period\u2019, unlike when a home that is for (private) sale has been purchased. There are different rules in each state and territory concerning bidder registration too,\u201d he said.<\/p>\n There\u2019s a range of custom-built technology platforms which agents can use to run online property auctions.<\/p>\n They include AuctionNow, GAVL, Anywhere Auctions, Openn Negotiation, HomeBid, SaleEzy, SoldOnline, Market Buy, Transaction Room, Auctions Live and SoldOnline.<\/p>\n Shill or dummy bidding \u2013 the practice of bidding for the purpose of \u201crunning up the bids\u201d without the intention of buying \u2013 is illegal in Australia, Mr Ellis explained.<\/p>\n \u201cIn theory, one way this might happen is if a home owner colluded with a friend to register to bid (and did so), but to stop short of the reserve figure. The problem with such a strategy would be that if a genuine buyer didn\u2019t bid after the \u2018shill bidder\u2019 dropped out, the auction would fail,\u201d he said.<\/p>\n <\/p>\n Vendor bids are allowed, though. Made by the auctioneer on behalf of the seller, a vendor bid is not an actual bid to buy the property, but a public statement that the seller is not happy with the amount of the last bid. It\u2019s used to keep the bidding moving forward.<\/p>\n The auctioneer must announce they are making a vendor bid. There are different rules across the country about how many vendor bids can be made.<\/p>\n Yes, it is still possible to sell in Victoria at present. While private home inspections and in-person auctions are banned in Melbourne and the Mitchell Shire until at least mid-September under stage 4 restrictions, online inspections and auctions are still permitted.<\/p>\n In regional Victoria, where stage 3 restrictions are in force, auctions have also shifted online, but in-person inspections by private appointment can go ahead.<\/p>\n Read more: Covid-19 property inspection rules<\/strong><\/p>\n Mr Ellis said one of the biggest advantage of an online auction is convenience for remote buyers.<\/p>\n \u201cBidding can be done from anywhere with an internet connection, making it easier for more buyers to participate. Equally though, weather or local environmental challenges, such as traffic jams, can\u2019t affect the bidding either.\u201d<\/p>\n Ms May said with a virtual auction, the pressure is off for buyers. \u201cThe physical distance will allow the buyers to be more rational and also mean no last-minute run through the property before the auction begins!\u201d she said.<\/p>\n Seeing bids on a screen means buyers can \u201cthink more clearly\u201d, when compared to hearing them briefly yelled out. Also, as online auctions tend to be slower, it allows buyers to think more clearly, Ms May said.<\/p>\n From a buyers\u2019 perspective, there are several disadvantages of online auctions.<\/p>\n Not being able to \u201ceyeball\u201d the competition is one, Ms May said. Being able to pick which other bidders are relying on the \u201cbank of mum and dad\u201d, who are the empty-nesters and so on is an important part of any buyers\u2019 strategy.<\/p>\n The auctioneer has more control in an online auction, she said, because they manage the tone and speed of it. That\u2019s something a buyer can more readily influence in person.<\/p>\n \u201cAlso, using the technology can be more stressful and add more pressure to the situation too.\u201d That technology needs to work seamlessly at both ends too.<\/p>\n For sellers, there can be a concern that in a less \u201creal\u201d environment, buyers won\u2019t get as emotionally invested and therefore won\u2019t bid as high.<\/p>\n Buying a home via an online auction can present some challenges from buyers. Picture: realestate.com.au\/buy<\/p>\n<\/div>\n David Scholes, founder of virtual auction platform SoldOnline, said the rules with online auctions are essentially the same as a conventional one.<\/p>\n Generally speaking, this means bidders must:<\/p>\n \u00b7 register for the auction and identify themselves to the agent;<\/p>\n \u00b7 have their finance pre-approved;<\/p>\n \u00b7 clarify the vendor\u2019s terms on the contract via the agent and request changes if needed;<\/p>\n \u00b7 ensure they\u2019ve read and understood the terms and conditions of the particular platform being used, before bidding.<\/p>\n Ms May said buyers should always read the bidders\u2019 guide too.<\/p>\n This is a document that must be provided by the selling agent before an auction. It gives information on how to register and what paperwork needs to be filled out, the relevant privacy laws and the rules and regulations of the auction.<\/p>\n \u201cMake sure to get one of these before you start to seriously plan out your bidding.\u201d<\/p>\n<\/div>\n Realestate au <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"What is an online house auction?<\/h2>\n
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\n<\/div>\nWhat does it mean when a property is in auction?<\/h2>\n
What platforms are used for online property auctions?<\/h2>\n
Is shill bidding illegal in Australia?<\/h2>\n
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\n<\/div>\nCan I sell my house under stage 4 restrictions in Victoria?<\/h2>\n
What are the advantages of online house auction?<\/h2>\n
What are the disadvantages of online house auction?<\/h2>\n
\nMore from Guides<\/h3>\n
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\n<\/div>\nWhat are the basic rules when bidding at an online house auction?<\/h2>\n