“We’d like our buyers to be excited and engaged by online auctions, but the important thing is that at the end of the process we can provide a level of information that is not available from in-room auctions,” says BidX1 managing director Stephen McCarthy as we watch the firm’s debut UK sale unfold on screen on 7 March.
We see bidding take off for lot 18, a former pub, the Railway Tavern, in Langley Mill, Derbyshire. One party had staked a claim shortly after bidding opened at 9am and it was only as the lunchtime deadline for this lot approached that two further bidders emerged.
“Now we’ve got an auction,” says McCarthy, smiling. Over the next six minutes, a further 45 bids are placed by the same three parties and the deadline automatically extends by 60 seconds each time a further bid is made within 60 seconds of the last. The lot finally sells for £126,000 against a guide of £80,000.
The successful party – Bidder 13540 – is the same person who bid just after 9am. BidX1 signs the contracts on their behalf the same day and sends signed copies to their solicitor and the vendor’s solicitor. The balance of the 10% deposit already provided by the bidder is due within two working days.
Returned fees
The unsuccessful bidders automatically have their participation fee – £4,500 for a property of this size – returned, although some choose to transfer it to another lot.
Knowing who didn’t buy is arguably more valuable than knowing who did. “We know who the bidders were, where they are from, how many miles they are from the property, and whether they viewed the property,” says McCarthy. “That’s the kind of information vendors are going to require going forward, in a world of transparency, a world of data, where you must know your client and comply with money laundering regulations.”
By the end of the day, BidX1 had sold 37 of the 65 predominantly residential, localised and rural lots: 10 prior and 27 on the day in multiple auctions with staggered deadlines. All lots were offered on an unconditional basis and the total raised was £4.1m.
“We know who the bidders were, where they are from, how many miles they are from the property, and whether they viewed the property”
“It’s a normal auction, with marketing and viewings. It’s just that we’re not in a room today with a hammer, we’re doing it online,” McCarthy says.
We are watching from London, but back in Dublin, he says, his staff will have been in constant dialogue with registered bidders throughout the process.
With their help, the 27 lots that sold on the day attracted 236 bids between them, ranging from just one bid for 11 of the properties to 68 bids for a development of four semi-detached homes in Kilkeel, County Down, Northern Ireland. The latter sold for £286,000 against a guide of £190,000.
Re-offering lots
The success rate rose to 62% and the total to £4.5m the following week, after one property sold post and two others were re-offered for auction successfully on 13 March. Re-offering unsold lots a week later, after consulting the vendors, mirrors BidX1’s approach in Ireland, where it launched online auctions in 2015.
Auction results and bidding history are easily accessible on the BidX1 website and McCarthy says he wants to share data with UK auction data provider Essential Information Group.
He is obviously keen to improve on BidX1’s first, small UK sale and has already scheduled its next UK auction for 26 April. He hopes to start bringing in higher-profile lots and bigger-income producing commercial properties that could attract international buyers.
Vendors in the first sale tended to be large holders of stock: property companies, private equity funds, banks and receivers.
“We haven’t gone after private clients yet. We need to prove the process,” he explains. “We’ve had a lot of people contact us since we started the process. I think they’re not unhappy with traditional auctions, but we want to bring new buyers to the process by exposing property to a wider audience.”
BidX1 sold €37m of stock through its online auction in Ireland earlier this month, with an 84% success rate, and McCarthy is determined to expand the UK operation into “a very relevant player.”
Eye on the UK market
“For what we do, the UK is the best market on the planet,” he says. “We didn’t set out to be the biggest auctioneer in Ireland. I’d like to think it happened because we are very good at what we do. We like big businesses.”
Vendors are receptive to online auctions, he says. “There’s an acceptance that this is coming at some point. We had some interesting stock, but it was probably more tertiary than prime – although it was great value.
“When you’re trying to break the mould, you have keen supporters and you have people who sit on the sidelines waiting to see if it works.”
BidX1 bought UK auctioneer Andrews & Robertson in January and McCarthy hopes to buy one or two more traditional UK auctioneers.
“We are following a dual path to growth: by changing people’s perception of auctions through the online process and by buying traditional auctioneers. We don’t believe in-room auctions are finished, so we want to run an omichannel business. “The goal is to be all online – but only if that works for the vendor and purchaser.”
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