Net Yet To Catch Home Hunters
Sun Herald
Sunday July 23, 2000
Conventional means of buying a property at auction may soon be knocked aside by the cyber gavel. But Cindy Martin asks if we are taking to the techno auction far too quickly.
THE INTERNET may have revolutionised the way we do business, but buying a property in cyberspace could be classified as a little different from paying your phone bill.
Changing the way we conduct auctions to make buying more attractive to cybernauts may be a little premature.
While women often have the overriding say in the decision to buy, most mothers prefer the real world to the cyberspace better understood by their children.
Di Jones Real Estate group managing director Timothy Schwan has used technology to complement the auction system rather than turn it into a cyber circus. The agency's online service, at dijones.com.au, supports the use of a traditional auctioneer in familiar auction surroundings.
On the other hand, the Milestone Group, an Australian e-commerce generator of business-to-business applications, has exclusive rights to license Homebid.com's web-based home auction platform.
Homebid.com is an American company that was first to develop and implement a high-performance platform for buying and selling real estate online.
Homebid.com claims to provide real estate professionals with the resources they need to offer Internet-savvy homebuyers and sellers a faster, easier method of finding, researching and purchasing homes online.
This would mean a huge change to the auction system as we know it.
According to Mr Schwan, the Di Jones auction technology is the most advanced in the Australian market.
``People can view our auctions live on the Internet from anywhere around the world, but as yet there is no-one with the technology to accept bidding of a property online," Mr Schwan said.
``Because the auction is transmitted down a cable line, there is a 10-second delay and at the speed bidding progresses in rooms, it wouldn't be viable for a buyer to bid online with those delays.
``The property would be sold before the bidder had finished typing in a bid."
Di Jones Real Estate offers virtual tours of five rooms in any property. It has the capability to e-mail contracts and you can watch an auction live on the Internet. But bidding must still be done on the telephone to counteract time delays.
``One of our clients, Mark Armstrong, who lives in Hong Kong, took a virtual tour around a house in Paddington and fell in love with it," Mr Schwan said.
``We e-mailed him a contract immediately, he watched the auction live on the Internet and bid over the phone. He bought the property for $520,000, sight unseen."
The Milestone Group claims to have the technology to allow buyers to bid online, but what it plans to do is change the auction system as we know it.
Instead of the bidding being simultaneous with the in-room auction, the auction is carried out over three weeks. During that time, buyers can view other offers, and seek additional funding or credit to stay in the process. Once an offer is accepted by the seller, which can be at any point during the three-week window, that offer is considered binding.
``In Australia, home auctions are commonplace, and in certain cities like Sydney it's the standard way to buy a home," Milestone Group CEO and director Mark Majzner said.
``Homebid.com's technology will improve the economics and profitability of the industry, providing Australian real estate professionals with a powerful new set of sales and marketing tools and a more efficient method to market to overseas buyers.
``The system also provides bidders with convenient access to the information, contracts and reports needed to complete their property transaction smoothly from their home or office."
Real Estate Institute Auctioneers Chapter chairman Nick Lyell said he had not heard of the Milestone Group or Homebid.com.
``It sounds like a public tender process rather than an auction process," Mr Lyell said. ``With a tender you put your bid in a sealed envelope and place it with a real estate agent to be opened at a certain time on a certain date.
``This process would be made public by the bids being available for all to see on the Internet. You really have to look at the benefits of the auction process to decide if this extended auction period would work.
``The whole idea is to catch the heat and emotion of the moment, the competitiveness and the urgency. All those factors are taken away if you have a three-week window in which to place your bids."
Mr Schwan said Di Jones introduced cyber technology for a small sector of the market, not the majority.
``It really is for people who feel very comfortable with technology and for people interstate or overseas," Mr Schwan said.
``We don't see it as the norm for every household, nor would we want to.
``The auction environment will always be retained for the reason that it is the one process that achieves the maximum price for your property in the shortest period of time."
Watching the Di Jones auction on the Net, there was more excitement in the auction room next door.
A three-bedroom house in Paddington had just sold for $83,000 above the reserve.
Both buyer and seller were in the room, caught up in the excitement of the moment while we waited patiently for cyberspace to replicate the moment. A moment that was now lost.
© 2000 Sun Herald