The rise of the online auction – How Do Online Land and Property Auctions Work?

Online property auctions offer an opportunity for both land and property buyers and sellers to view, bid on or sell exciting lots from the comfort of their own homes. This type of auction offers convenience and speed for both buyers and sellers, with bidder pre-registrations, downloadable legal packs and full auction supervision by an experienced auctioneer. But how do online auctions work? 

If you’re interested in either purchasing or selling a land or property via auction and haven’t been involved with a land and property auction before, Clive Emson Auctioneers have created this guide to explain how it all works, from start to finish.

Find out how much your property will sell for at auction with a FREE APPRAISAL HERE. If you’re ready to speak to us about auctioning your property online, we can provide a free appraisal and let you know how much your property is likely to sell for. 

How do online auctions work?

Effectively, the concept of an online auction is the same as an in-person auction. Like a traditional auction, an online land and property auction is managed by the auctioneer, who consults with the seller beforehand to agree to the guide price shown in the lot and the reserve price – their minimum sale price.

There are also several aspects of an online auction that are similar to the conventional process:

The Auctioneer would conduct an in person inspection of the potential lot and provide a written auction appraisal including the auctioneer’s terms and conditions.

• A seller would instruct an auctioneer
• Sellers instruct a solicitor to compile a legal pack, to provide prospective buyers with all available legal documentation giving a comprehensive overview of the land or property for sale. The auctioneer will market the property, organising photography, block viewing days and a video walk-through to showcase the condition and nature of the property, inside and out.
• Bidders need to register with the auction house and provide their details to be verified before the auction begins.
• The highest bid, at or above the auction reserve price when the timer reaches zero, wins – the buyer pays a deposit there and then, and the balance along with any additional fees normally within 20 working days.
• The bidding process is transparent and accessible

As you would expect, the main difference with an online auction is that neither party needs to attend an in-person auction to be able to take part. Instead, the auction marketing begins in advance, with a confirmed auction opening and closing date and time.

Bidders submit their details for verification before bidding and can see whether the reserve has been reached and what was the last bid placed to inform their next move. Likewise, a seller can sit in on the auction and watch the bids rolling in – albeit from any location of their choosing.

Selling a Property at a House Auction Step By Step

The first aspect of selling land or property at an auction is to consult with the auctioneer since they will provide invaluable information regarding market conditions and recommendation for guide prices and reserves.. Usually, online auctions are set to start on specific dates – view our upcoming online auction dates here. 

Reserve prices are the minimum figure you will accept and can be influenced by buyer interest, demand in the area, and the size, nature and condition of the property.

Next, you will need a solicitor or licensed conveyancer to provide a legal pack, which consists of all the relevant legal documentation required to form a legally binding contact. These documents can be downloaded or accessed through the auctioneer by the interested parties, including things like:

• Common auction conditions and special conditions of sale Title deeds
• Title plans
• Planning permission
• Floor plans
• Tenancy agreements
• lease information
• Local authority searches
• Along with any other relevant documentaion

The legal pack may also include the property information form and in some cases an inventory of all fixtures and fittings. The Common Auction Conditions and Special Conditions of sale set out the terms by which you are selling the home, so it can include the required deposit and details about the completion date when you hand ownership to the new owner.

Related Reading: Do I need to hire a solicitor to sell at auction?

From there, the auctioneer proceeds with marketing and will list the property along with videos and photography on their website, alongside circulating the particulars to interested buyers and their local property network database.

Working with an experienced auction house means that, on the day, you don’t necessarily need to participate but can watch the bidding process – this often spans two or three days to allow sufficient time for all interested parties to submit their bids.

If you’re looking for further detail on the selling process, read our guide here: how does a property auction work? If you’re ready to speak to us about auctioning your property, we can provide a free appraisal and let you know how much your property is likely to sell for. Get in touch here. 

How to Purchase Land or Property at an online auction

To take part a buyer will need to register their details and complete an anti-money laundering check. Registration is simple but is mandatory to ensure all bidders have been verified and cross-checked against an official form of photo ID.

There is no charge to register as a buyer, and you need to include a few straightforward details for due diligence purposes. If you wish to bid straight away, you will need to join the live auction, where you can see when the most recent bid was placed and whether the reserve has been reached.

Tracking a lot is a handy way to keep tabs on a house auction you are interested in, and you can even create notifications or decide to bid via proxy to avoid missing out on a property you’d like to buy but where you are unavailable towards the end of the auction when the bidding is often most competitive.

This is a great advantage for buyers as they can clearly keep tabs on all of the properties that they’re interested in. This can be more difficult in an in-person auction.

Frequently Asked Questions

What are the key advantages of an online auction?

There are several advantages of an online land and property auction compared to traditional auctions. Here are some key benefits:

• Anyone Can Attend: Online property auctions provide a greater level of accessibility to potential buyers. As long as you have an internet connection and are able to login and register before the auction ends, you could be bidding on a property in London from Singapore! For sellers, this opens up the auction to a larger pool of potential buyers and increases competition, potentially leading to higher sale prices.

• You don’t need to travel: The convenience factor is a big advantage for those participating in online auctions. You can participate in auctions from the comfort of your own home or office, eliminating the need to travel to a physical auction location on a specific day. This also means cost savings, which are often passed down to buyers and sellers.

• You can see every move: As the auction is online, buyers will be armed with all the information they need. Buyers can access detailed property information, legal documents, and inspection reports online, enabling them to make informed decisions. During the auction, the bidding process is visible to all participants, ensuring transparency and fairness and adding excitement – online auctions are just as exciting as in-person auctions!

• Competition As we mentioned, due to the location independence of buyers, online auctions can generate more competition amongst bidders due to their wider reach. The competitive nature of auctions can potentially result in better returns for sellers whilst giving buyers confidence that they are bidding at current market levels. Bidders also have the opportunity to observe and respond to competing bids, which can create a sense of urgency and encourage active participation. For those that prefer a quiet space to make decisions, online auctions are ideal.

What is Live Bidding on an Online Land and Property Auction?

Live bidding is as it sounds – you can watch the auction counting down and place incremental bids, proxy bids or larger non-incremental bids Note that ‘blind bids’ are not accepted, and for a bid to be confirmed, it should be higher than the previous highest bid.

If you are the successful bidder but are outbid, it is entirely your choice whether to submit another bid, but whoever is the current highest bidder, provided the reserve has been met, will become the successful buyer when the auction ends.

What is Bidding by Proxy on an Online Property Auction?

Proxy bids are ideal if you cannot bid live but are keen to register your interest. You can place a maximum proxy bid using the online platform, this will then bid incrementally on your behalf up to but not above your set maximum bid.

The auctioneer will not accept any bid as a final selling price for a property if the value falls below the agreed reserve price providing assurance for both parties that the thresholds they set are finite and confirmed.

During an online house auction, the digital timer acts as the virtual gavel. Confirmed buyers are then obliged to pay the deposit, which is usually 10% of the purchase price, although sometimes this may differ for very small lots or those of a lower value.

If you’re looking for further detail on the selling process, read our guide here: How to sell a house by auction. If you’re ready to speak to us about auctioning your property, we can provide a free appraisal and let you know how much your property is likely to sell for.