Author: Eli Greenblat
Date: May 19, 2008
Publication: The Age
Concerns have been raised with the State Government about how public auction laws apply in cyberspace.
Technology is racing ahead of outdated legislation, with vendors and agents in other states already using online negotiation systems, such as eBay and 2bid2.com.au, to auction property.
eBay has recorded 33 sales in its real-estate section this year and last month sold a Sydney apartment with harbour views for $1.49 million.
Another website based in Queensland has a dozen online auctions listed — its first sale was a Sunshine Coast home that went under the electronic hammer for $890,000 — and is looking at expanding in Victoria.
A spokesperson for Consumer Affairs Minister Tony Robinson confirmed that the Government had directed Consumer Affairs Victoria to investigate the practice.
The Real Estate Institute of Victoria, which helped push for the review, says it is concerned that consumers have little or no protection when they conduct sales online.
"We asked the minister to consider that when auctions go online that the legislation is there to protect consumers and protect both parties in the transaction," REIV chief executive Enzo Raimondo said.
"We want to make sure that all the safeguards and protections of the legislation that apply in physical auctions and the disclosure of notices and requirements agents make are transparent to the online environment."
At present, bids for property on eBay are not binding in Australia. Other sites have different policies depending on where they are based, but there is no consistency nationally.
Mr Raimondo said he did not know of any Victorian properties sold at an internet auction, but he expected it was only a matter of time.
It was popular elsewhere, he said, "because people are long distances away and may not physically attend". It was also more likely in the case of properties with particular appeal to overseas buyers.
The practice is bigger in the US, where sites such as eBay have thousands of listings, including beachfront property in Florida and California, as well as plots of land and ranches across the Midwest.
In Australia, eBay has 150 items in its real estate section, most in regional Australia. It has a piece of land in West Gippsland listed, as well as a three-bedroom house in Melton.
In the three months to May, 33 items on eBay's real estate section were sold with an average sale price of just over $312,500.
The founder of Queensland-based 2bid2.com.au, Michael Davoren, said he believed online auctions would be highly attractive to some buyers and sellers.
"It changes pressure, not that harsh pressure that people experience when there is an auctioneer yelling at them and a real estate sales person babbling away in their ear," he says.
"They can be sitting in their loungeroom at home making decisions sensibly and without that sort of pressure."
He said his company, which operates under Queensland legislation, was totally transparent with complex software designed to keep out "dummy bids" and ensure the credibility of the transaction.
All bidders must register with the site before an auction takes place.
"We have more details (on bidders) than you would on a Saturday afternoon out the front of a property in Melbourne.
"It will grow fairly quickly, and we will launch in New South Wales within a month and then in Victoria very quickly after that."
Launched six weeks ago, 2bid2.com.au has sold two properties over the internet.
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