Home truths: It's lift off for new online-only era
Published 08/05/2015 | 02:30
ON a breezy day in March, a plane was stalled on the tarmac at Heathrow following a delay. The frustrated passengers took out their phones and tablets. Some attended to their social media and mail, some played games while others caught up on the news.
But while the plane sat idle, one Dublin-based passenger bought two apartments then and there using his iphone in a property auction held in cyberspace. By the time his plane took off, he had spent just over €200,000, acquiring a unit in Santry and another in Beaumont. He was perhaps unaware that his dual purchase heralded the take off of a whole new era for property selling in Ireland.
The investor had been participating in the first Allsop 'online-only' auction held that month during which 65 properties went on offer in a 24-hour period. This saw 48 homes sell with a combined value of €6.86m. Not only were deeds bid for, but legally secured online in a single session. Due to its success, a second session will take place on May 21 offering a similar number of homes.
So after a few false starts, online-only has arrived with a bang. Today, you can not only home hunt online and bid online, but legally acquire deeds - without leaving your seat on a delayed plane.
Like air travel, not so long ago an Irish property auction was a grand affair resplendent with pomp, ceremony and restricted largely to the rich and their trophy homes.
In the boom years, an auction meant turning up to a timber-panelled room with pile carpets and the whiff of beeswax polish in the air. It (usually) meant a haughtily-spoken podium chaperone in a well-cut suit waving a wooden gavel and charmingly cajoling, while also chastising his charges in a vaguely sadistic manner for not coughing up more cash.
The vendor had to pay for the price of a month-long national marketing campaign to draw attention to the property, the fees were higher to cover the dedicated attentions of a top auctioneer and the costs of a big room attendance event. Old style auctions were also tainted by the codology of grossly underestimated pre-auction guideline prices - deployed to generate interest and put bums on seats.
On the upside, the higher prices that could be generated in a room packed with largely uppercrust competitive alpha males, skilfully wound up and set off against each other by a knowing auction choreographer, obviously made it all worthwhile - for vendors at least. Once the bubble burst, that was largely the end of 'old' auctions with no disclosed reserves.
But back again to online only - because yet another system has been proving successful of late - that being run out of Galway City by the IAM-Sold franchise.
Ironically, the Galway set-up may have gained a boost from Allsop whose rude move into the regions some years ago miffed many local agents when it began snatching forlorn properties from local books to feed into the big attendance events in Dublin. Low price lots that had languished for a year sold in hours.
The Allsop success in poaching and processing apparent lemons from the regions was partly to do with disclosed reserves - something which had rarely happened prior and which simplified the process hugely for a buyer - but also by the resurgence of the investor, access to affordable nationwide marketing and a hitherto unaffordable nationwide auction platform for cheaper property.
While local players grumbled about 'drive-by valuations' and poached properties being 'undersold' the reality was the owners just needed these homes sold quickly and the 'monster' auction process was made for this.
For their part, local agents didn't have access to a national auction platform and were generally restricted to private treaty sales. So to some degree a solution to the local agent's dilemma came with the recently landed IAM-Sold 'partnership' system which, like Allsop, is a UK import.
The franchise has been offering local agents an accessible and affordable nationwide (and UK wide) auction platform with a strong online presence which is also backed by the clout of a large British outfit.
Offered as a 'cog in' service to local estate agents, it allows them to retain control of the sale with no fee demanded until the property is disposed of. Only then does the franchise take a cut of the selling fee from the local agent.
The success rate for these online-only auctions has been running in the 80pc range with 20 to 30 properties offered at a time. IAM-Sold also run big attendance live events too.
And so do other operators like O'Donnellan and Joyce, also in Galway.
It took a crash and technology to devise new systems for selling property when existing ones were failing with some property types. The innovative new cocktail now being served means auction access is no longer a first-class ticket affair.