This article originally appeared in Estates Gazette in January 2022.
\nAs I write this, the world is getting to grips with the Omicron variant, so it would be a very brave auctioneer who would predict when we may once again be in the room. In the autumn of 2021, we surveyed our clients to discover their preferred options on auction formats. While many would like a return to the room, others responded well to the move to remote sales.
\nThe survey showed that 68.5% of respondents preferred in-room bidding, while 24.1% would choose the option of bidding over the internet. However, there were several signals that a number of buyers had enjoyed the convenience that remote auctions have afforded.
\nI accept that our survey was not an exhaustive, industry-wide study, but the results have certainly given us plenty to think about for when the pandemic is behind us. It has also made the advent of a hybrid auction, conducted in a ballroom like before but with the retention of bidders being able to place their bids over the internet, seem ever more likely.
\n\n
Many anticipate that property auctions will move to a hybrid model, combining the benefits of an online auction with the traditional ballroom sale.
\nI think this could be where the industry will move to eventually, but we are some way off; bidders must become comfortable with attending an auction in person again, and the risk of another lockdown will mean a reluctance on the part of auctioneers to book venues.
\nThere are a number of factors to weigh up when considering where the short- and longer-term options lie:
\n\n
1. If it ain’t broke… As things stand, no one can predict when it will be completely safe to have a large group of people in a ballroom, and remote auctions do seem to be performing well for both sellers and buyers. While this uncertainty remains, the remote auction is an acceptable alternative to the traditional ballroom auction, and I believe that this is the path that most auctioneers will pursue in the next 12 months.
\n2. Knowledge is power. I think you would be hard pressed to find any of my auctioneering colleagues who would argue that the increased visibility on the status of, and interest in, the lots we are selling hasn’t been helpful. With every bidder having to register for (and therefore indicate their interest in) every lot they intend to bid on, auctioneers are better placed to advise clients than they were pre-pandemic; whether it’s where to set the reserve or whether the lot should be withdrawn, we now have more information at our fingertips than ever before. However, to move to a hybrid model would rob us of some of this information, as in-room bidders would again be free to bid on what they wish.
\n3. Balancing digital and in-room bids. Anyone who has conducted or participated in a remote auction will know that the pace of these sales is far slower than the traditional auction. The reasons for this could be attributed to a number of things – auctioneers not being able to control the pace of the sale as well and bidders feeling less pressured to make their decisions, to name but two. There would be a danger with a hybrid auction of there being a two-paced bidding conflict, with the bidders in the room going quickly and those online still being slower. As an auction can only progress as quickly as its slowest bidder, could there be a danger of it becoming a frustrating experience for those in the room?
\n4. A marketplace. One of the things that I miss the most about the ballroom auction is the opportunity to speak at length to both buyers and sellers on the day. One of the best indicators of the health of the market is the buzz in the room before and during the auction. I know that many of our clients miss this too, and I think that it is one of the quintessential essences of an auction. While a hybrid auction would bring an element of this back, it may be possible that the atmosphere of the room could be diluted with a proportion of bidders still being online.
\n5. Turning tables. It’s odd to think that pre-pandemic, remote auctions were very much a niche. The past 20 months or so have turned this on its head and I think that in the short to medium term, sales of this nature will remain the norm, with the in-room and hybrid auctions becoming an alternative over time. It would be a very brave auctioneer indeed who would not offer any form of internet bidding at all, but who knows – perhaps, as this may hold a certain appeal to some buyers and sellers, there may be a niche created here.
\nCovid has been the mother of invention and adaptation for the auctions sector, which has sold property in ostensibly the same way for hundreds of years. Incorporating new sales methods, appealing to a broader range of buyers or developing a reputation for excellence in a certain method of sale will lead to success for auctioneers and, I believe, over time lead to increasing numbers of properties being sold at auction.
\n\n
I wish all my industry colleagues a successful 2022!
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