Online auctions are gaining popularity as many prospective buyers look to place their bids from the comfort and safety of home.
Read on for a run down of how these online auctions work.
Public auctions may have been banned for now, but that can’t stop you from buying the home or investment of your dreams.
Online auctions have quietly emerged over the last few years, allowing punters to place their bids from the comfort of the couch. Now, these online sites are hitting their stride, allowing real estate sales to surge ahead despite COVID-19 restrictions on public gatherings.
So, how do these online auctions work? It’s important to remember that all of the same national and state rules surrounding the auction process still apply. The process and terminology is still the same.
Attendance and bidding are the only things that have changed, and here’s what you need to know.
Similar to bidding in person at a real estate auction, you need to be an approved registered bidder for an online auction.
Contact the selling agent for the property you’re interested in to ask them for the online auction details. They should be able to provide you with the site you should visit and how you can register. Generally, this involves visiting the website and entering a few details. Once you’re approved, you will receive a bidder ID to use when placing your bids.
Many online auction sites will then send you regular updates and reminders about your upcoming auction. When the time comes, simply sign in and select the auction you’re interested in. You’ll then be able to watch the action and place your bid.
Types of online auctions
While still relatively new, advancing technology is improving the online auction experience all the time. There are already different types of online auctions, allowing sellers and selling agents to utilise a system that best works for them. These systems are also very intuitive, providing a secure and highly accessible online environment for prospective buyers.
As of now, the two most common types of online auction are live streams and genuine time bidding.
Live streams are online auctions happening in real time. It’s like being at the auction, except you’re watching everything happen on a screen. You can be a registered bidder placing your bid on your laptop or mobile device.
Once the auction begins, you can watch and hear everything happening in real time over the computer, placing your bid whenever you see fit. The auctioneer will communicate with you through the website.
Genuine time bidding
If you’ve ever participated in an Ebay auction, you may be familiar with genuine time bidding. This type of online auction has a set start and finish time. Auctioneers can oversee the bidding process, set minimum bidding increments and announce the winning bid.
In many cases, if a bid is placed in the last five minutes of the auction, it will extend the auction for another five minutes, allowing all bidders the chance to consider the current bid and whether or not they wish to continue.
Placing the winning bid
If you place the winning bid on the property you’re interested in, you will instantly be notified through the website. The actual process of signing the contract will depend on the website used for the auction; however many online auction sites allow you to handle all of this electronically through a secure online portal.
You’ll receive a call from the selling agent immediately following the auction, who will be able to walk you through the next steps. Some agents are even utilising these online environments to conduct video meetings with successful buyers, creating a more personalised experience that replicates an in-person auction.
Tips for bidding online
If you are thinking of bidding in an online auction, there are a few things to keep in mind to ensure your chances of success:
- Use high speed internet — you don’t want to fall victim to delays caused by a bad internet connection.
- If you’re interested in more than one property, online auction sites can allow you to participate in more than one auction at a time. Just make sure you don’t spread yourself too thin.
- If you’re facing competition, try quick bidding in equal increments to indicate that you have a big budget.
- Don’t rely on slow bids in an online auction environment. Your connection could lag, causing you to lose out.
- Make sure you register in time. Many online auction sites require you to be approved at least 72 hours before the auction is due to take place. Don’t forget to take into account that there may be an approval process involving identity verification, which can take extra time.