Online auctions vs the traditional auction
Ever found yourself taking the day off work, traipsing down to an auction room, and waiting in a room full of people to try and bid on a house? How do you know that all of the people in the room are actually legitimate buyers? Sometimes you are bidding and your work colleagues are watching, where is the anonymity? What about auctions onsite? Some real estate agencies like this method – the way I see it is if it rains it’s a disaster! Let’s face it, it rains a lot in NZ, and the last thing you want is nobody turning up to the sale of your biggest asset. Traditional auctions are hard, time consuming, antiquated, and basically a waste of time and money!
At Proppy.co.nz we have developed a smarter way to sell your house. No more wasted time – you can now buy and sell property from the comfort of your own home. Let’s talk about online auctions.
An online auction is a method of selling to the person who bids the highest, the person who is prepared to pay the most! It is an open process whereby keen buyers bid against each other online via www.proppy.co.nz. Once the reserve price is reached, the property is then on the market and will be sold to the highest bidder.
At Proppy.co.nz you will increase your odds and save yourself the cost of an auctioneer and all the fees that go along with it. With the auction being online it means expats and/or NZ’ers living in Singapore, London and China for example can all participate. Not to mention the many kiwis living in different regions of New Zealand that obviously can’t drive to your local auction room who want to join in. An online auction increases the buyers pool & we believe it’s a no brainer.
What are the benefits by selling via online auction?
Online - Your auction is not weather dependent and people can access it anywhere as long as they have internet. Sense of urgency – The online auction date sets a finite selling period and creates a sense of urgency among buyers.
Unconditional – customers/buyers must bid on an unconditional basis with no conditions so once you have sold via online auction you can confidently put the sold sticker up!
Buyer competition – Because the auction is online this allows more buyers to bid as they no longer have to take time off work to attend an auction and they can login from anywhere to participate. Buyer competition can lead to a premium price. You are in control – you set the reserve and the settlement date that suits you
Options – You are able to accept any offers before the online auction day. Discuss how this is possible with your licensed Proppy salesperson.
Auto-bids – buyer can set auto-bids which create excitement and encourage a high price.
After the completed online auction both the winning buyer and the seller will sign the legally binding sale & purchase agreement digitally (online). Instead of being in a stuffy online auction room while paying for parking you can do this from the comfort of your home. If you are out and about, no problem, you can bid on your smart phone – genius!
Key points to know about our online auction process:
- Our online auctions are FREE – no need to pay for an auctioneer!
- Online auctions run for 24 hours. The online auction is set to start 24 hours before the chosen finish time. For example, if an online auction is set for 8pm it will finish at 8pm, 24 hours later. Loads of time to increase the house sale price for the vendor. Plus, for a buyer it gives you time to truly consider your bid and have your friends and family around you for support.
- Proppy.co.nz online auctions will not allow seller (vendor) bids. However, the seller sets the starting (opening) bid for their property
- Bids – can be set at any number you wish. If you use the auto-bid functionality, bids will increase in increments of $500 until you reach your auto-bid limit
- If you win an online auction you will be notified by email and are asked to sign the sale and purchase agreement online. Once the buyer has completed the sale and purchase agreement the seller will be asked to sign the sale and purchase online and the transaction is completed. Final copies of the documents are emailed to all parties
- All buyers read and acknowledge the Proppy buyer’s agreement before the online auction, and are legally bound by the terms. Proppy knows who the buyers are & will work hard to get a great sale price for your property.
How do you know that the buyer is legitimate?
Before the buyer is allowed to bid there are quite a few security checks that Proppy.co.nz conducts (actually much more than a normal auction). To bid at an online auction you must have a NZ passport, NZ licence, or have a NZ lawyer to agree that you legally can participate. As it’s a legally binding online auction, if you bid & are successful you will have to go through with the purchase. We have built a very smart piece of kit here so rest assured it will be safe & secure online.
If the online auction is advertised as “unless sold prior” Proppy.co.nz will accept unconditional pre-online auction offers. If a pre-online auction offer is made then the sellers salesperson will notify the seller (vendor) that there has been an unconditional offer made and if the seller agrees Proppy.co.nz will bring forward the online auction. If the online auction is brought forward then all interested parties will be notified of the new date, and the unconditional offer will be the first bid of the online auction.
If an online auction does not hit the reserve:
No need to negotiate in a stuffy room if the property hasn’t hit reserve! Use our unique technology to negotiate online & complete the transaction.
Your Proppy.co.nz salesperson will call and email the seller and let them know that their reserve hasn't been met and will invite them to negotiate online with the highest bidder.
Proppy will call and email the highest bidder and invite him/her to the price negotiation screen online.
Online negotiation will be open for 2 hours only. It is recommended that sellers are online while the online auction is taking place – why wouldn’t you be? It will be fun and our salespeople are there to help you every step of the way.
If either party (seller or buyer) cannot start within the 2-hour window after the online auction has finished, the online negotiation is void and the listing goes to a standard offline negotiation state through Proppy.
When the buyer makes an offer, the seller’s window will automatically update with the price and the seller will be able to accept or withdraw the offer by clicking on the appropriate button. If the seller clicks the accept button, then the deal is made. The system will then create the digital sale and purchase agreement for both the buyer and seller to sign online.
If the seller is not happy with the offer, they can keep making a counter offer by typing in an alternative sale price. If either the buyer or seller clicks the withdraw button, the online negotiation finishes. The online communication is then stopped and neither party can make any more offers. The listing now enters normal negotiation state, where all buyers can make offers on the property through Proppy.co.nz. The seller now has a chance to change their asking price.
If there are no bids, or the 2 hour, window doesn’t result in an agreement the online auction is terminated. The online auction turns directly into an offline negotiation state. The seller will be contacted by Proppy on next steps on how they would like to proceed - you are in control!
The Final Word:
Do you get excited while bidding on Trademe, trying to bid on an item that you really want? Now you can do the same & get excited about buying property online! So, as you can see an online auction is a great way to sell your property while saving a truckload of money. Remember you get all of this for only 1.5%* + GST commission. Genius! If you would like to speak to me further about online auctions please get in touch with me. It is the way of the future!