As we specialise in online sales, we were well-positioned to combat the challenges facing us throughout 2020 and into early 2021. Even so, as momentum has returned to the property market and the economy more generally, it’s no surprise that this year has seen an increase in both the volume and value of sales at BidX1.
€275 million-worth of Irish property has been sold on our platform so far this year. Demand outpaced supply by a wide margin; 24,000 bids were placed and, while there was €275 million in actual sales, the bids placed by unsuccessful parties came in at a whopping €750 million.
That level of liquidity was driven by an increase in bidder numbers, by an increasing proportion of repeat bidders – 31% in 2021 – and by our international investor database (6% of buyers were based outside Ireland).
The increase in approved bidders has been significant (over 4,200 in the year-to-date, a 26% increase on 2020), but we’ve also seen a notable increase in levels of bidder engagement.
In 2019, 80% of those who were approved for bidding prior to an auction went on to place a bid once the auction opened. This year, that figure jumped to 95%.
Meanwhile, properties with a single bidder were very much in the minority. In fact, 44% of the properties sold attracted 3 or more bidders – and those properties achieved an average of 32% above the listing price.
At BidX1, our roots are in the traditional auction market; large-scale events held at the RDS in Dublin, several times a year. In many ways, our digital model has been successful because we have been able to take the best aspects of the auction process and incorporate them into a modern, online platform.
This year, we have started to apply the same principles and approaches to the Private Treaty market, a shake-up which we believe is overdue.
Private Treaty is simply an industry term for the standard method of selling property in Ireland. In this scenario, which is the norm, buyers don’t even get to see the Contract for Sale or other legal documents relating to the property until they have already reached the ‘Sale Agreed’ phase. You wouldn’t buy a suit without trying it on, and yet when it comes to high-value real estate purchases, we simply accept flying blind for the duration of the process.
The result is obvious: an inefficient, opaque, and slow process, with significant fall-through rates.
Since launching our Private Treaty business in 2021, we’ve successfully reduced completion times for these sales down to 16 weeks or less, by giving potential purchasers access to the legal pack during the marketing period. Anyone can download these packs from our platform and, once they’ve completed their due diligence, they can also place offers through the platform.
This means that, at BidX1, the ‘Sale Agreed’ period is subject to finance/survey only.
Our approach has placed us in the midst of a debate on the conveyancing process, and I am grateful to have had the opportunity to outline the BidX1 process to government officials and public representatives.
The concept of a ‘Seller’s Legal Pack’, whereby sellers are required to provide buyers with key documents relating to the property at the commencement of the marketing period, has now been elevated to parliamentary debate: a bill to this effect was presented to the Dáil last month.
This is a positive step. However, I firmly believe that for change to happen, the impetus must come from buyers. They are entitled to demand access to the legal information in advance of making an offer, and transparency throughout the offer process.
Otherwise, we will be stuck with a time-consuming and stressful conveyancing process.
The need to improve the property transaction process, particularly when it comes to transparency and efficiency, is not a challenge unique to the Irish market. Many of the same challenges are reflected across Europe.
We’re fortunate to have welcomed two new investors this year, both of whom recognise the value that our model can offer to buyers and sellers in the broader European market – global management consulting firm Oliver Wyman, and the leading servicer in Southern Europe, doValue, a company with €160 billion of assets under management.
It’s interesting that many of the lessons learned during our traditional auction days, including the increased transparency around legal documentation, have helped to build a platform that is now serving buyers and sellers in five markets – and counting.
Jonathan Fenn is Head of BidX1 Ireland. This piece originally appeared in the Business Post here.