The majority of property auctions are currently held in rooms with some online auctions available. According to Neil Singer, chief executive of Clicktopurchase, in the future, there will be no physical auction rooms.
The reason for this he says is blockchain technology. At an offline auction, as soon as a winning bid has been confirmed and has reached or exceeded the reserve price, a binding verbal contract is made. The auctioneer then trusts that the buyer will pay a 10 per cent deposit and settle the remaining balance within 28 days or less. Though a contract has been made a level of trust is required between the auction house and the buyer.
Singer argues that the world is moving towards blockchain technology that does not rely on trust. Property transactions secured with blockchain technology have a record of the sale which cannot be altered or erased.
Lambert Smith Hampton is moving all their auctions online soon and other property auctions houses could follow. Online auctions can provide the electronic data that blockchain technology needs.
Clicktopurchase is a website where property can be purchased by private treaty and through real-time auctions. All transactions are recorded using blockchain technology. In theory bridging loan offers to complete the property sale within the 28-day deadline could also be recorded using blockchain.
Neil Singer’s views may not be shared by the property business as a whole but are a part of the discussion on ways in which the property market and property funding may change.