Understanding Auction Types

Modern Auction vs. Traditional Auction

• Online property auctions typically follow either a modern method of auction or a traditional method of auction. While both offer a streamlined and transparent bidding process, they have key differences in terms of timing, deposit requirements, and completion deadlines.
• In a traditional auction, bidding occurs in real-time, with properties selling to the highest bidder once the reserve price is met. Once a bid is won, the buyer must immediately pay a deposit (typically 10%) and exchange contracts. The remaining balance must be settled within a fixed period, usually 28 days. This method is often preferred by experienced investors and cash buyers, as it requires a quick turnaround with immediate financial commitment.
• The modern method of auction, also known as a conditional auction, offers more flexibility. Bidding is still competitive, but instead of an immediate contract exchange, the winning bidder secures the property with a non-refundable reservation fee. The buyer is then given an extended period, often up to 56 days, to complete the transaction. This method is more accessible for buyers who require mortgage financing, as it provides extra time to arrange funds and conduct further due diligence.

Timed Auctions and Event Auctions

• Another common format is the timed auction, where properties are listed with a fixed bidding window. Unlike live auctions, where bidding occurs in real-time, timed auctions allow bidders to place their bids at any point within the allotted period.
• Event auctions, on the other hand, involve multiple properties being auctioned in a scheduled online event. Buyers can register in advance, browse the auction catalogue, and participate in multiple property auctions within the same session. These events often attract a large audience and generate competitive bidding, making them ideal for buyers looking for investment opportunities in bulk.

Proxy Bidding and Auto-Bidding Features

For those who cannot actively participate in live auctions, proxy bidding and auto-bidding provide convenient alternatives. Proxy bidding allows buyers to set a maximum bid in advance, and the system will automatically increase their bid incrementally to maintain their position as the highest bidder up to the pre-set limit. Auto-bidding functions similarly, ensuring buyers remain competitive without having to monitor the auction constantly. These features are particularly useful for investors managing multiple properties or those bidding from different time zones.

What Happens After Winning a Bid?

Once a bid is successful, the automated auction system instantly notifies the winning bidder via email and the online platform. At this stage, the process transitions from an automated system to a manual phase, where legal and financial formalities are completed. The winning buyer is required to pay the necessary deposit or reservation fee within the specified timeframe. Legal documents, including contracts and buyer packs, are then prepared, and the buyer must complete the full payment within the given period. Failure to meet these obligations could result in financial penalties or forfeiture of the deposit.