Online auctions are gaining momentum. Not only do they provide convenience to buyers by allowing anyone from anywhere with internet access to participate, but they also give the seller more exposure for their property. We talked to United Country Auction Services Executive Vice-President, Shawn Terrel, to find out all of the ends and outs of online versus the traditional live method of auctions.
What types of property typically do well in an online auction verses a live auction event?
High demand or unique items like guns, coins, advertising memorabilia, art and other collectible items do particularly well because they attract people from wider regions who would want the item, but may not want to travel and risk not winning the bid. In contrast, if you have something in high demand that is specific to that market or area, a live auction can be better. For example, if you have row crop farmland up for auction and there are area farmers who have driven by that land and have wanted it for years, they bring that excitement to the auction. Farmers will bid against each other and create a high level of energy. It’s hard to build that kind of passion online.
One way auction companies are working to enhance that energy online is to now have live audio and video. It can bring the energy of the room to the buyer online. If you don’t add that feature, you may not get that heat of the moment feeling you get when you’re standing there with your bid card in the air and listening to the auctioneer.
What is the advantage of an online auction over a live auction?
You can reach a much broader pool of buyers with an online auction. Also, a big limiting factor with live auctions is the weather. If you have severe weather of any kind, you may have to cancel or postpone a live event. An online auction will happen regardless and people can bid from the comfort of their home or business.
What is a typical marketing and auction timeline with an online auction?
It’s not much different than a live auction. The marketing can run concurrent with the online auction, which is roughly 30 days from start to finish. You saturate the market and bids are placed the whole time during the marketing timeline. The important thing is to keep the bidding open for the full marketing timeline or else you can miss buyers.
Do online auctions have any added liability or issues that a live auction does not?
With online auctions, there is always the possibility of technology failure. If you’re out in the country without internet service, you are out of luck. My advice to bidders is to use the maximum bid feature when you have the opportunity in case something comes up later and you can’t. For auction companies, it’s important to get good photographs and provide extensive descriptions to keep bidders well-informed and interested.
What advice do you have for sellers looking to sell via an online auction?
- Look for an auctioneer that is thorough and will explain all of the risks, terms and conditions, and potential liabilities.
- Inspect their online bidding platform. Ask them for the web address. You should be able to look online and see past auctions. Talk about the results from those auctions.
- Ask the company what their process is. Do they have staffing available to come to your property? Do they have cataloging and photography services? Ask important questions and expect an explanation.
- Find out if they have shipping or loading services. Make sure they plan to have staff on site to assist buyers and prevent theft from happening.
United Country Real Estate is the largest network of traditional and auction real estate professionals in the United States. If you want to know more about online auctions, or would like to find an auctioneer near you, visit www.UCAuctionServices.com