This summer marks the tenth anniversary of the first ever online-only property auction to be held in Ireland. The auction was run by Allsop Space, now known as BidX1, and marked the beginning of a new era in property auctions in Ireland. To mark this milestone, Emer Coyle from Beauchamps speaks to Mary Fahy, Senior Auctions Sales Negotiator with O'Donnellan & Joyce Auctioneers ("ODJ"), Galway City. ODJ is one of the leading regional auction houses involved in online property auctions. Mary has extensive experience in property auctions, having joined ODJ in 1995 and manages the ODJ auction sales since 2005.
"Burnt a few forests"
Mary remembers the lead up to the live (in person) auctions that used to be held by ODJ in the early 2000s. Usually, it involved the sale of a unique property, such as a large, detached home in a sought-after area of Galway or a significant development site. The venue was usually a hotel in Galway. Mary recalls late nights spent printing copies of the contract and title documents. If there was a change to the contract, they would have had to pull out and replace those pages in all the contracts that had been printed. Add to that the telephone calls to interested parties to let them know that there has been a change to the Conditions of Sale and you have a massive, paper-heavy workload. Mary says they certainly "burnt a few forests" along the way!
"Open to moving with it and wanted to move with it"
It is no wonder then that ODJ was one of the first regional auction houses to venture into the world of online property auctions. Was Mary concerned about the risks of moving to online auctions? No, Mary says that ODJ are acutely aware that technology is moving all the time. According to Mary, ODJ was "very open to moving with it and wanted to move with it". Mary says that ODJ's move to online auction sales resulted in "huge manual work" being removed from the auction process. All the contract and title documents are uploaded to the ODJ website. If a solicitor makes a change to the legals, the purchaser is alerted by way of email.
Did ODJ find it hard to get a reliable IT partner? Mary recalls they were contacted by a lot of UK companies regarding online property auction software. ODJ eventually teamed up with the Essential Information ("EI") platform and developed the ODJ website to incorporate the EI platform. ODJ initially used EI software for uploading the legal documents and later incorporated the online bidding process.
"Grown more and more"
So how did purchasers react to this new way of buying property at auction? According to Mary, the uptake on online bidding was "slow initially", with very few bidding online. Most people were still signing up for telephone bidding or attending live auctions, in particular for land sales. Interested parties based in Galway were still happy to come to the live auction in the ODJ offices. However, Mary notes "that has really changed since COVID". During the pandemic, ODJ stopped allowing interested parties attend live auctions. The auction was streamed live from behind closed doors, with an option for telephone or online bidding and Colm O’Donnellan behind the podium conducting the incoming bids. Mary says that, since the pandemic, the appetite for online property auctions has "grown more and more".
Does Mary think that the move towards online auction sales has alienated certain types of interested parties? Mary says this has not been the case for ODJ, as they still offer telephone bidding. She believes that online bidding suits purchasers who do not want to spend time travelling to an auction for which they might not end up being the successful bidder. Due to the requirement to pay a fee, most people who sign up for ODJ auctions are genuine bidders who are there to make a bid.
"Press that button"
ODJ offer interested parties the opportunity to bid online or by telephone. The auctioneer hosts the auction live online and the online bidders can see the estate agent behind the podium on the screen. The auctioneer cannot see the online bidders. The auctioneer hosting the live auction will know that there are bidders online but cannot fully interact with them, he is waiting for them to "press that button". The staff of ODJ are at their desks within the office taking phones bids and raise their bidding paddle each time a bid is received which is recorded for the online bidders to see. The online bidders are given the opportunity to counter bid. The auction is streamed live on the ODJ website for the public to view. However, members of the public must pre-register to bid. Mary describes how some online bidders just "sit back " during the auction, not making bids until the last minute. ODJ have seen auctions where there is only one bidder online, but they wait until the very last second to press the button. Whereas if there is a bidder on the telephone the auctioneer can talk to them and kickstart the bidding in that way. Mary notes that "[i]f they are on the phone they are inclined to give some level of bid".
What is the quickest type of property to sell online? Mary describes how the sale of commercial property, such development land is generally successful at auction as the interested parties are usually businesspeople who have a plan and there is less emotion. In contrast, Mary's experience is that people who are buying their first home feel more comfortable talking to an agent.
"Bidding Away"
Mary believes that the volume of online property auctions will continue to grow. Over the last 12 years it was mainly repossessed properties that ODJ placed for auction. Mary is of the view that if the conveyancing process is simplified and all legal documents are in place prior to a property going to market, then more private individuals will start to sell their property by way of auction. Mary knows of people in the property industry who would prefer if all property sales were online auctions as those sales tend to be quicker transactions for both the vendor and purchaser. The sale is contracted on the auction day, giving comfort to both parties that the sale is binding.
However, Mary's view is that private treaty sales will never completely fall away. This is because for an auction sale, the purchaser has to front load a lot of time and expenditure (legal due diligence, property surveys etc.) in circumstances where they might not be the successful bidder. The bidding process for private treaty sales is increasingly happening online, especially in the last two years. Mary notes that where you have 6 or 7 parties bidding on a house and it can be difficult to keep all parties updated on current bids. Online bidding in private treaty sales is a tool to facilitate the bidding and is not binding. Mary believes that if "the market fell back" then sales would need "the more personal touch" and the online private treat bidding process may not be as popular. She believes the market will determine how quickly the use of the online private treaty bidding process will grow.
For now, Mary says the online property auction market is buoyant, with interested parties "bidding away".
For more information, please contact Emer Coyle or your usual Beauchamps contact.
