The right moves: Property's online revolution
Developments like virtual reality viewings are grabbing the headlines, but technology is also changing how the buying and selling process has operated for decades. It's no surprise that the man at the sharp end of this change did not arrive into the business through the traditional routes. Indeed Stephen McCarthy's time spent as part owner of a Mercedes Benz dealership in California, was part of his education in using technology to maximise efficiency and in making it easy for the customer to buy.
Back in Dublin, Mr McCarthy undertook some property investment but wanted to bring his ideas on maximising technology in estate agency to life. He founded Space Property Group which comprises the commercial advisory firm QRE, the boutique residential agency Hunters and Allsop Ireland. Whilst the Group was launched in the recession, Allsop Ireland seized the initiative in launching large scale auctions here and beat of many larger players, who were slow to react to the changing market.
A real breakthrough came last year when the Group moved the entire auction bidding and contracting process online for certain auctions and in fact, I don't believe that everyone in the market fully realises how far the online revolution has come. As Stephen McCarthy points out, whilst online auctions are well established in the US, they are not yet at the stage there of signing contracts online, so the Allsop Ireland move may well be a world first.
In the online auction process, all the legal documentation is available online in advance. Viewings of the properties take place as normal, the auction runs from say 1pm to 4pm on the designated day and bidders bid online during that period. Each bidder can see the bids made by the other parties. If any bidder engages in "sniping", that is, trying to make a bid in the last minute, all bidders are allowed to rebid. The successful bidder signs their contract and pays their deposit that day, all online.
This is a breakthrough in efficiency as any auctioneer will tell you that the most stressful part of their job is the day of the public auction. Apart from coping with large numbers of people on the premises, the auctioneer needs private rooms for juggling meetings with clients, solicitors and purchasers. However in the online auction, the auctioneer can continue working at his desk, whilst watching the bids coming in. Allsop Ireland sold around 200 properties by this method last year and are running more auctions this year.
A key to all of this say's Mr McCarthy is making it as easy as possible for buyers to buy, whether they are in Ireland or abroad. "We are opening the market to a wider audience, particularly the Irish diaspora, and a wider audience creates the best price."
For commercial property only, QRE will also be launching an online "best bids" service, as an alternative to the existing "best bids in an envelope by 5pm" practice, which is so disliked by purchasers and where they have no chance to make another bid. In this online version, Stephen McCarthy says that purchasers will be pre-vetted, will have to show proof of funds and confirm that they have approved the legal documentation.
An important factor in the success of online bidding he says is transparency. "Contrary to what a lot of people in our industry believe, the more information you give a purchaser, the quicker they'll pay market price. Buyers want to see everything in front of them, including the bidding and they want to avoid that spiral of upward offers, where they're not even convinced there's another bidder there."
Another sign of how Stephen McCarthy approaches the market differently is that three of his sixty staff are software development specialists and indeed they intend to "white label" some of their technology and licence it to other agents. Because he found that the legal process was slowing sales, he employs two lawyers who streamline the process of "getting the legals online."
Asked about a perception that online auctions are the preserve of lower value properties Mr McCarthy said "This is because the new market is in its infancy. As the processes mature and develop we will follow the US model where the higher value commercial assets are normally auctioned online. The market will settle into a situation where both online and traditional public auctions will run together."
Agents ignore the growth of online auctions at their peril.