Home truths: Tech to transform Irish home sales
The successful sale of two Dublin 8 apartments this week through a new online bidding process will likely mark big changes in the way homes are sold in Ireland. In the process, technology will likely transform estate agency practices in the same way it has already turned so many other sectors inside out.
Back in the mid-1990s, I recall writing a piece for this newspaper speculating that people would eventually go "virtual home hunting" - find their dream house as they sat at their desk or even from their kitchen table at home. That article finished by speculating that one day they might even bid for and buy property online.
Today it seems unusual that we found this surprising. But back then, estate agents all over Ireland were deeply worried about getting 'online' - even if many of them weren't sure what the worldwide web or information superhighway was all about. In those days, if you wanted to buy a house, you had to buy a newspaper to see the advert listings and then you had to get down to the estate agent's shop and pick up a hard copy brochure (with four or six glossy printed photo snaps glued to each one) to get the in-depth data.
Back in 1995, estate agents controlled all the information pertaining to houses for sale. To sell your home, you needed a property professional with a sales network who was the necessary 'go to' for buyers and whose window display was the focal point of finding a home for sale.
The middle man or woman was paramount. And for the sale of upper-middle end and large luxury homes, the public auction event system was absolutely vital. You registered, made your way to a venue and bid in person.
We've long become used to finding houses online. So the agent's job is no longer to 'match' us up with a property - he or she is no longer usually the contact point at which we find our homes when we are buying. What we have needed the auctioneer and estate agent for is to conduct and administer the bidding and sale process itself.
Then in 2015, Allsop Space conducted Ireland's first online-only property auction, selling 45 properties through that process for €6.8m.
Bidders provided pre-authorised credit card details, allowing the auction house to immediately deduct deposit payments, thereby legally securing the deal on the spot. The auction house was also granted power of attorney by both buyers and sellers, giving them the right to sign contracts on behalf of both parties once the bidding process ended. And thus, through this session and others like it, we saw the beginning of the end for attendance auctions. So what is there left for the estate agent to do?
Well more than 90pc of houses and apartments sold go through the private treaty process - and then the administration of 'best and final offer' sessions, which occur when homes have more than one eager bidder chasing.
But last year, technology moved in on this process too when a small showroom investment in Dublin's Blackrock suburb sold using an online sales technique employing an Irish-developed technology called BidX1 in the sales process. The technology was launched specifically to replace the sealed-bids procedure deployed at the end of a private treaty sales campaign.
This allows investors to bid against each other online in an open and transparent platform, with contracts being executed at the end of the bidding and the financial deposit collected.
The session, which saw the sale of the property, attracted five investors who bid competitively during a 60 minute period. A legal contract was issued to the successful bidder at the end of the process. And earlier this week, this process moved into the residential market for the first time when Hunters Estate Agents used BIDX1 technology to sell two Dublin apartments in the Daintree Building in Dublin 8.
In the big picture, we're heading into a much shorter sales-process period and an age where buyers can bid, check out property, deeds, certificates et al and buy and pay using a smartphone.
For vendors, we will see a process which is far less intrusive (online virtual group viewings are also likely to become more common).
For estate agents, who currently spend 50pc plus of their time following up the minutiae of deals which have already been agreed, it means they will have much more time on their hands to concentrate on drumming up more properties for sale and, for the core of what's left of their duties, to offer valuation and sales advice and to market a property.
New technology will likely mean far less staff can process the same number of house sales, or that the same number can process twice as many.
For vendor, buyer and agent alike, great big stonking changes are afoot.