Property auctions have changed dramatically over the past 30 years, evolving from small-scale events focused on lower value property to day-long sales with a wider selection.
Back in the 1980s, marketing for property auctions largely consisted of mailing out thousands of black and white hard copies of a catalogue prior to auction day, and some print advertising in real estate publications and local newspapers.
Today, the platforms that can be utilised are far more significant and varied. Catalogues are now online and properties are listed on search portals. Social media continues to become more influential – for example, Savills has a dedicated auctions Twitter handle and regularly features posts on its blog. Meanwhile, television shows like Homes under the Hammer have helped to bring auctions into the mainstream.
The purpose of marketing has remained broadly unchanged: to get buyers into the room, either in person, by phone or proxy. Quite simply, to achieve the highest possible price for a property, it must target the widest range of professional and private buyers.
Over the past 30 years, the reasons for selling at auction have stayed consistent, ranging from needing a fast and transparent sale to owning property that it is difficult to establish a value for. But how auctioneers communicate with prospective sellers and buyers has naturally evolved, as has the traditional profile of the buyers and sellers.
The auction room is no longer the domain of property professionals, and a new demographic is looking to buy and sell at auction. For example, owner-occupiers would rarely buy or sell via auction 15 years ago and, while they are still a minority, their activity has increased by around 30% during that time. Selling via the auction room will not be right for all owner-occupiers, but it is a sector that we expect will grow in the future, as most types of property are suitable for auction, depending on a realistic reserve price being agreed.
A large number of builders and developers attend auctions looking for property that is in need of modernisation and refurbishment. If your property falls into this category, you might well achieve a higher price at auction than you would if you were to sell it via private treaty.
We had a recent sale in south-west London where the seller had purchased the property via an online agent. The original sellers had needed a quick sale and the property needed renovation – a perfect instruction for the auction room.
That is exactly what the new owner did, and only three weeks later achieved £105,000 more at auction than they initially paid for the property. It’s a shame the original seller did not seek proper advice and ended up losing a significant sum of money, rather than considering the auction room.
The key to effective marketing is making auctions more accessible to a wider audience who have both greater confidence in and understanding of the process.
Savills’ website now contains easy-to-understand guides, from “How to buy a property at auction”, to a useful glossary on key auction terms and phrases. There is also a spotlight on some of the more unusual property investments that you can find, from ground rents to garages, and a detailed FAQ section.
It also contains property details for our upcoming auctions and past sales, as well as providing auction alerts and legal documents to download. Online bidding is available and live streams broadcast the action on the day, encouraging buyers to get involved wherever they are in the world, with the most exciting sales profiled on Twitter. You can even pay your deposit with your smartphone using the Barclays Pingit app – a real change from the days of cash-only purchases.
The internet has and will continue to transform marketing techniques. However, it was only three or four years ago that these new tools were properly embraced by the industry.
Savills Auctions has already sold 735 properties in 2016, raising more than £220m. Going forward, the integration of technology will be crucial to further increase the reach and diversity of sales and the auction room.
And with growing marketing opportunities offered through greater technology, there is no reason why owner-occupiers will not become greater participants in the auction room over the next decade.
Chris Coleman-Smith is head of auctions at Savills
