Our in-house auctioneer, the well-respected and highly acclaimed Richard Copus is a Fellow of the National Association of Valuers & Auctioneers, an Honoured Fellow of the National Association of Estate Agents, and an industry trainer for Propertymark.
Richard shares his thoughts with us on the current status of property auctions...
Online auctions are here to stay, but never forget the advantages of the auction room
Covid saw a major shift in auction practice from so-called ‘ballroom’ auctions (live ones held at real venues) to online events. Whilst the reasons for this were fairly obvious, with social distance restrictions in place, why haven't real auctions bounced back?
Before Covid, there had been a movement towards online auctions, facilitated by greatly improved IT and internet connections. There is a strong argument that online auctions open up the marketplace, particularly to investors buying so-called ‘streetliners’, where they do not want to view the property that they are interested in and can rely on the accuracy of material information provided by the auctioneer. Similarly, telephone and proxy bidding does not have an immediate connection with a sale.
However, why are so many auctioneers continuing to auction properties online, which would clearly be better sold in front of a live audience? Are auctioneers becoming lazy as a profession?!
There is certainly the argument that it is much easier to deal with an auction from the comfort of one's office or living room, with the computer clicking up the bids automatically as they come in, and it is cheaper and much less time consuming for the auctioneer. But that is not what an auctioneer is trained to do.
A good auctioneer will be able to use their people skills and personality in an auction room to motivate bidding, and they will be able to inspire bidders by the way they conduct the auction. Getting the first bid in is often like trying to move a mountain and a mix of humour and repartee can spur on the first bidder. Changing the increments when the bidding gets tough to suit the mood of the room often leads to a renewal of bidding; I've reduced gaps from £2,000 to £50 at times to get the ball rolling again. Encouraging the underbidder's partner to nudge their other half to make that extra bid when it is clear they want to buy the property; all these things are impossible to do online.
Once an auctioneer has given up live auctions for more than a year, it is a fact that it is psychologically difficult for them to start auctioning in the room again. The thought of standing up in front of a crowd of people becomes a fear rather than an excitement, and the thought of the adrenaline rush and exhilaration of a successful sale just doesn't register anymore. So, they shouldn’t leave it too long!
An auctioneer has a legal duty to obtain the best price for their client - as does an estate agent - and there is no doubt that some properties do sell better in the room by their very nature.
I sold two properties last year for which I could not have achieved anywhere near the price I did, had I auctioned them online.
One was the auction of a village hall. It was a controversial sale and we and our clients decided it would be best to hold the auction in a live setting where everything was transparent, and all concerned could see exactly where the bidding was coming from. The room was packed with members of the community alongside prospective bidders. The price guide was £50,000. After the first few bidders had dropped out, we were left with two people bidding against each other. The atmosphere was electric. Both were determined to buy the property and the body language between the two of them as they bettered each other's bid would have made good prime time TV! I eventually dropped the gavel at over £100,000. It is highly unlikely that such a high figure would have been obtainable in the benign atmosphere of an online auction and our clients were very satisfied with the price achieved, and with having been able to see exactly what had happened.
The second was the auction of a grade II listed, detached Georgian town house in need of substantial TLC, but with lots of character. I decided to hold the auction in the property's drawing room because it had a wide bay window where I could site the rostrum, and bidders would have a view straight over the beautiful garden. Again, the room was full. The price guide was £500,000. Bidding started at £510,000 and our clients would have been happy to achieve a bit more than that. Bidding was very slow initially and I had to do all I could to keep the bids coming in. That is the point at which a good auctioneer will crack a few jokes to relax the bidders and create an inviting atmosphere. At around £550,000, I was left with two bidders. It was like trying to draw blood out of a stone for the next quarter of an hour, but blood I did draw, sometimes waiting two or three minutes for the counterbid. 27 bids later we achieved £607,500 for the property! An embarrassing round of applause followed, which was a great feeling and made me more than happy in the knowledge that what I had achieved for my clients I could never have done with a rigid online model.
So, horses for courses. Online auctions are here to stay and have become mainstream in auctioneering. But any Tom, Dick or Harry can manage bidding on a computer, and auctioneers are qualified property professionals. We should never forget the advantage of auctions in the room. There is most definitely still a place for them, as I have illustrated above and, at the end of the day, I would argue that you are only a real auctioneer if you can practice live auctions.
