How to Run an Online Property Auction
Homes, land, garages and tenanted investments can all be sold by timed online auction. The auction itself is the simple part; what makes it work is the preparation before bidding opens and the legal process after it. This guide covers both.
Last updated
Choose the format with your lawyer
Property auctions come in different forms. In some, the winning bid creates a binding contract at once and completion follows within a fixed period; in others, the winner pays a fee to reserve the property and then has a set time to exchange contracts. Which formats are used, and how they must be run, differs by country and state. Agree the format and the conditions of sale with the seller’s lawyer before anything is advertised.
Prepare the legal pack
Serious buyers want the documents before they bid: title, searches, the conditions of sale, any leases or tenancy schedule, planning information and required certificates. Publish them with the lot and keep them updated; a late addition can change what a bidder is willing to pay.
Set the guide price and the reserve
The guide price tells buyers where bidding is expected to go; the reserve is the confidential minimum the seller will accept. In some countries the rules link the two — for example, a reserve may not be set above the published guide. Check the rules where you sell, and keep both realistic.
Arrange viewings and inspections
Offer block viewings on set days, and let surveyors and contractors in if buyers ask. Photographs, a floor plan and a video tour on the listing reduce wasted viewings, and a clear statement of what is included — fixtures, land, rights of way — reduces surprises.
Qualify bidders before they bid
Every bid on a six-figure lot should have a name behind it. Require bidders to register and accept the terms, and carry out the identity and anti-money-laundering checks your regulator requires — these are the agent’s duties, not the auction software’s. Let buyers who cannot watch the close leave a maximum bid in advance.
Run the closing
Give each lot a fixed closing time and use soft close, so a late bid extends the clock rather than winning in the last second. Keep the seller informed as bidding develops, and have a plan for a lot that finishes below the reserve: an offer to the highest bidder, or offers invited for a short period after the close.
Hand over to the lawyers
After the close, the winning bid is only the start: deposits, contracts, client money, completion and registration are handled by the parties and their lawyers under the terms you published. Send both sides the details promptly, and follow the process you agreed in step one.
Frequently asked questions
How does an online property auction work?
The property is listed with its legal pack and a closing time; registered bidders bid online until the close, with late bids extending the clock. What happens next — an immediate binding contract or a reservation period — depends on the format and the conditions of sale agreed with the lawyers.
What is the difference between a guide price and a reserve?
The guide price is a public indication of where bidding is expected to go. The reserve is the confidential minimum the seller will accept. Some countries regulate how the two relate, so check the rules where you sell.
Who handles deposits and contracts after an online property auction?
The buyer, the seller and their lawyers, under the conditions of sale published with the lot. Auction software runs the bidding and records the result; it does not hold deposits or complete the sale.
Can a property that fails to sell at auction still be sold?
Yes. It is common to accept offers for a short period after the auction, starting with the highest bidder, or to re-offer the property with a revised guide price.