While they’ve been around for a while, property auctions are becoming an increasingly popular method of buying and selling properties due to the speed of sale, security they offer and the chance to purchase properties for a bargain price.
Alongside traditional auctions, there has been a rise in online auctions in recent years. There appears to be space for both as the popularity of auctions continues to grow, but what are the advantages and disadvantages of each type of auction?
Here at Auction House Essex, we take a closer look…
What is a traditional auction?
Traditional auctions, or live auctions, are exactly what you would expect when you think of an auction event: gavels, auctioneers speeding through items, bidders holding up paddles to place a bid and so on.
These auctions take place in a physical location at a specified time and usually last for a few hours, depending on the length of bidding.
To participate, bidders must attend the auction in person or have a representative present. Exchange of contracts usually happens immediately and many purchases are made in cash.
The main benefit of live auctions is the human factor. Buyers are able to see the property beforehand before committing to a purchase, while sellers can also talk to any prospective buyers.
Sales are also completed much faster, usually on the day of the auction, which is a big draw for those wishing to achieve a speedy sale. What’s more, live auctions hold the charm and nostalgia that is lacking in an online setting.
Additionally, traditional auctions are exciting as buyers can get caught up in the hype of the moment, leading to rising stakes among bidders. This presents a huge advantage for sellers to make more profit from their properties.
And, as live auctions require the buyer to be there to purchase the property, this takes the unlimited competition aspect away when compared to the online world, meaning bidders are more likely to acquire their desired property.
What is an online auction?
Online auctions follow the same basic principles as traditional auctions, but with added flexibility. The time frame is also much longer as bidders can bid over several days, weeks or even months from their home or office.
An online auction is exactly what it says on the tin: buyers and sellers can participate from anywhere as long as they have an internet connection. This brings convenience, a large market and a smaller time commitment to auction participants.
Once a bid is accepted by the seller, sales are completed within 28 days in an unconditional auction, but can take longer to process if it is a conditional auction.
As well as being convenient – with exchanges happening on the fall of the virtual hammer – the online method can also be less expensive for sellers due to the elimination of costs associated with holding a traditional auction.
Sellers are also able to invite anyone to attend the online auctions, bringing in even more buyers which can raise the bidding prices.
Buyers, meanwhile, have a variety of options and can still contact sellers or the auctioneering platform with any questions.
However, the main downside is the lack of face-to-face interactions. Online support cannot replace seeing something with your own eyes and talking to a buyer or seller in person.
Lastly, properties being bid on tend to be more expensive than at a traditional auction. With everyone online having access to the sale, there is the potential for more bids to compete against yours.
Of course, each auction method has its draws and obstacles, but with traditional auctions allowing a speedier sale and completion, it presents the perfect opportunity for both sellers and buyers.
As an auctioneer that specialises in both traditional and online auctions, here at Auction House Essex, we believe in selling at a local, regional and national level to achieve a high success rate. For impartial advice about any aspect of selling or buying a property at auction, please fill in our contact form or give us a call on 01702 333 399.