An online auction service is planning to double the number of estate agency branches using it by the end of this year.
Whoobid currently has 150 branches using it, and plans to expand to 300. It launched last autumn.
Alex Haigh, who co-founded the business with his brother Doug, said that online auctions have had a poor press – the HomeOwners Alliance has been critical because of the fees charged to buyers and the commissions paid to estate agents.
However, Haigh said that his own business differs from other models, with what he describes as “more sensible” commission levels.
It charges buyers a total of 2.5% (sellers pay nothing) of which 1.5% goes to estate agents and the rest to Whoobid.
Each auction sale lasts three hours, but if there is a bid during the last minute, the sale is extended by three minutes.
This, says Haigh, allows for greater competition and the opportunity of a better price for the vendor.
Both ‘traditional’ and ‘modern methods’ are used, with sellers having the choice of a certain sale at the fall of the electronic gavel or the ability to give sellers 28 days to sort out their finances and proceed with the transaction.
The firm’s business model is also reliant on local estate agents to introduce the service to customers, including listing the properties and conducting viewings.
The Property Ombudsman recently advised agents that they must warn sellers that they could get a lower price at auction because buyers factor in their own commission costs.
Haigh said that “as a safety net”, agents pass vendors along to Whoobid at a very early stage, meaning that its own staff discuss with sellers the pros and cons of the method.
The business is rolling out on a regional basis, with teams across the south and in London, and another in the north.
Its ten-strong team includes recruits from an agency background: for example, Kieran Hogan who has joined as a regional manager for London, has worked for both Sequence and Spicerhaart.
Whoobid’s strategy is to break into new regional areas and build its estate agency network to achieve national coverage.