Most of us have a soft spot for the auction process – and with TV programs such as “Homes Under the Hammer” beaming into our homes for years now, no wonder! The dusty hall, where you can eye your opponent as the auctioneer nears your top bid. The thrill of the chase and the ability to scope the competition. This is all part of the appeal.
Auction houses have a sense of excitement about them, and a lot has remained steadfastly traditional until just the last few years.
Technology has started to play a more important role in auction houses, providing the ability to bid on and buy property across the UK from wherever you are. While in the past you would need to attend an auction to secure your dream home or investment, these days you have a variety of tech-led options at every stage – from the original advertising of the auction right through to the payment for your new property.
Proptech is the way forward for buying (and selling) at an auction.
Searching for the perfect property – from wherever you happen to be
Traditionally, the purchase of a property should almost always take place after the property has been viewed in the flesh. But auctions are a little different.
The advent of online searching methods means investors’ can narrow down their search quickly and view only those properties they deem as suitable. They can
grab valuable data points using online services such as:
- aggregate listings sites
- Google street view
- high-quality descriptions, comprehensive digital legal packs and images (and even videos).
Auction house in Wales – but you’re in Scotland?
Not only that, but easy access to information makes life easy for the pre-auction investor property buyer – especially if they live in a different country within the UK!
Nowadays you can send and receive emails from your solicitor – you can even FaceTime them.
Plus, auction house apps and websites now provide the ability to download seller and legal packs, immediately.
Can’t get to an auction? No problem – welcome to electronic bidding and online auctions. A lot of auction houses will now offer an online option either instead of or alongside their live auctions.
The great advantage of an online auction is that much of the time, you may be able to bid in advance from the comfort of your armchair without having to travel to a live auction.
You may also be able to watch the sale on a live stream, and you often have the option of setting your bidding limit. That might take away some of the fun … but you will appreciate it.
REMINDER: As auction houses sometimes only release details about the properties coming up at auction a matter of weeks before the actual auction event, this gives the auction a very short shelf life. This means that all the due diligence from your side of things must be done quickly and efficiently.
The whole process is smoother and easier
From electronic payment methods to online solicitors, legal packs, and even mortgage offers, there is now specific financial technology (fintech) products aimed at the property auction market – enabling a quicker and more targeted response to the auction buying process. Every part of the auction property buying process is faster and smoother due to technology.
You can use your auction app to register and bid, chat on a forum with other investors to get great tips, explore the property and the surrounding area with Google maps, find online images from websites like PropertyAuctionAction.co.uk, and Rightmove and discover auctions near you with aggregate auction house sites.
Technology just makes things better, and auctions are no exception.
Tech and compliance
Speaking to Max Mason head of online-only property auction house 574.co.uk, he says the main uses for technology in the property auction space right now and for the foreseeable future will be around compliance (AML- anti-money laundering and KYC – know your customer) and using data.
In terms of compliance, he wants to see the HMRC issue more clear guidelines so the industry can respond and implement a standard code of practice. This could then open the door for more fintech-based AML uses such as geolocation, and biometric checks which provide a greater level of security.
For data, Mason says this will allow the company to use its predictive AI tool to better understand and predict the outcomes before an auction happens and how likely a lot is to sell ahead of time. This is still in its early stages. But with more data, comes more learning for the tool, which will improve its accuracy.
Tech and data
Richard Adamson, Partner and Auctioneer at Allsop explains that they have recently revamped their website and web app to better use existing technology that might seem old hat in other industries: “This has meant we have much more data on the types of people at auctions and where the interest is. We have also widened this appeal and made legal packs and more detailed property information available online and in the app.”
He added: “We’ve seen a three-fold increase in the number of people requesting property info via the app versus requesting hard copy catalogs. So, we’ve got 6,000 people using the app compared to 2,000 requesting hard copy catalogs.
“For the property auction space, we are at the cutting edge of what can be done and what the market can tolerate. We don’t feel the space is ready to embrace blockchain or other technology for the sake of it. If it isn’t adding value to the proposition, then tech for tech’s sake is not something we will be investing in”.
Justin Beckwith Director of Pattinson’s Auctioneers shares this view. “We are seeing a huge uplift in online auctions and technology has allowed us to move more online. This has increased the number of auctions we can run, and also an increase in the number of bidders for each lot.”
It seems that while we see rapid development in technology across different parts of the property sector, auction houses have in recent years been playing catch-up.
From what we see in the property auction space, the technology used is helping more vendors attract more buyers, and those buyers take part in auctions using any of the four main ways (in person, post, telephone, or online.) Online is clearly the growing element, and auction houses have responded to that need.
There is still work that can be done, of course. For example, perhaps adding blockchain to the auction process to make the transaction process fully transparent and immutable. This could mean that land registry and purchase records can be added to a blockchain process.
Blockchain could also, at some point, remove the middleman entirely from the process – we see this in other industries where technology takes the place of human governance. We also see blockchain being further used on AML and KYC as a blockchain could allow cross-sharing and validation of clients, hence speeding up the process and reducing costs.