David Scholes has carved out a hugely successful career as a real estate auctioneer.
His former business AuctionWorks handles over 70% of commercial property auctions on the Australian Eastern Seaboard and David has personally called about 35,000 transactions.
But he didn’t necessarily start with aspirations to be in real estate, nor in auctioneering.
Instead, the self-confessed country boy started in the 1980s as a stock agent in Tamworth, before opening his own agency in Orange with a specialist interest in fine wool.
When the industry collapsed four years later, David made the move to Sydney and ultimately into real estate.
“In 1992 I packed my bags and headed to Sydney,” David explains.
“I had auctioned several real estate properties prior to leaving the stock agent industry, but I went to Sydney not really knowing anybody or what sort of direction I’d take.
“I got my first on-site auction in Willoughby and built my own business from there.”
BIG NUMBERS FOR THE BANKS
Over a decade, David went from conducting about 10 auctions a year to personally overseeing about 1800.
His big break came when he was asked to conduct auctions on behalf of the major banks in the late 1990s.
His forte became creating hype around the sale while putting people at ease.
“I have often observed just how stressful traditional auctions are for buyers, vendors and agents alike,” David says.
“They’re conducted in a very public forum and people are expected to spend hundreds of thousands of dollars in a matter of minutes.
“I really went out of my way to develop an auctioneering style that put people at ease and created a mechanism of trust in the first 30-40 seconds of talking with people.”
Since then, David has built his business on this model, while also training some of the best-known auctioneers in the country.
In 2017, after 21 years running AuctionWorks, David sold the business to a staff member who had been with him for more than a decade.
David continues to call more than 600 auctions a year, but has shifted his focus to the online auction platform he developed in 2009.
David reflects his enthusiasm for technology dates right back to his early days as a stock agent.
“Even if I don’t understand the technology, I embrace it,” he laughs, noting his first foray into internet-assisted sales involved the marketing of livestock.
“We used to go out and actually film mobs of sheep and cattle, and that allowed people to offer their livestock for sale without taking them off the property.”
In his initial real estate agency in Willoughby, David and his team also harnessed the power of technology as one of the first agencies to use 360-degree photographs in their marketing.
Meanwhile, he introduced technology in his auction rooms that allowed people to watch the auction in progress and bid by phone.
This was accompanied by tools like online calculators, which showed rent return on the property, and the currency conversion of bids.
INTO THE ONLINE SPACE
A decade ago, David recognised the next logical progression in property purchasing could be online auctions.
He felt they would offer all the benefits of a traditional auction with the extra drawcards of buyer anonymity, the ability to purchase from any location, and without the high-pressure environment of conducting an auction on-site.
After initially releasing the online platform SoldOnline, David and his team settled on the brand AuctionworksOnline to complement his existing business.
It became the first online property auction platform in Australia and garnered initial interest but not widespread success.
“I think the timing was wrong and it was too early,” David reflects.
“Now, of course, the landscape has shifted dramatically.
“Not only are consumers more familiar with online auctions courtesy of platforms like eBay, most of the real estate journey is completed online.”
From the property search to identification verification, contact management, digital contract exchange and even settlement, the property purchase process is now largely digital.
“Our point is people do all of the research and all of the finishing touches to their property purchase online,” David explains.
“But when it comes to the most critical and important part – the purchase – we are forcing people to go offline, out of their comfort zone to attend an onsite auction.”
And that’s the final piece in the puzzle David is looking to change through the re-launch of SoldOnline.
LET BUYERS BUY ONLINE
SoldOnline builds on the ethos of AuctionworksOnline, but with new tools at their disposal, a new market in their sights and a more educated consumer in their corner.
Among the 800-plus auctions that have been conducted using the platform, early adopters have included banks and government, along with rural, residential and commercial agents.
“The NSW Government now use our platform as a method of sale for their regional assets,” David says.
“Some of the results they have are outstanding.
“I know full-well if you tried to employ a traditional on-site auction there would literally be one dog and two rabbits in attendance.”
Real estate agents are also increasingly seeing the benefits, with some of the country’s biggest brands and most innovative agents embracing online auctions as part of their selling toolkit.
David stresses this is key to understanding how SoldOnline works.
It is not designed to replace traditional auctions and it is not intended to replace agents.
It is instead a point of difference that agencies can add to their arsenal when it comes to handling a sale.
“We are not a disruptor to the real estate industry. We are an assistant,” David states.
“We don’t take a property listing unless an agency’s involved.
“That’s important, because we certainly understand the auction process requires the expertise of a third party to get the interest and the information to the right people to actually register.”
But for the agency and vendor involved, the system can offer real benefits, including many that bridge the gap between traditional auctions and private treaty sales.
• It allows an auction to be conducted over days to increase interest
• Bidders can register from anywhere The competitive nature of the auction environment is maintained
• Buyers have anonymity and can bid from the comfort of their loungeroom
• Properties in regional areas, outside traditional auction markets, can garner additional interest
• Legislated compliance is met.
“Both processes – traditional auctions and traditional private treaties – have their benefits,” David notes.
“There’s no doubt about it. We literally tick all the boxes of both but what we’ve created is all those benefits with greater flexibility.”
HOW SOLD ONLINE WORKS
David and his team have designed SoldOnline to be simple.
Agencies list their property with SoldOnline as they would with sites like realestate.com.au.
The agency then handles all the marketing as normal, but when a prospective buyer shows interest, the agent registers the buyer’s details on the SoldOnline platform.
The prospective bidder is then sent an email invitation to complete registration online, where they choose a secure PIN code and their bidder’s number.
Once in the system, they are taken to the property page where a clock shows the countdown in days, hours and minutes until the auction begins.
They also receive SMS alerts in advance of the auction and on the morning the auction begins.
Agencies then set a starting bid and are allowed to offer one further vendor bid throughout the auction process.
When the auction commences, the buyer can bid in set increments courtesy of a dropdown menu.
This can be reduced as the auction proceeds.
Every bid a prospective buyer makes requires them to verify it using their unique code to indicate they accept the terms and conditions and that their bid is non-revokable.
Then it is timestamped in the system.
Meanwhile, the site shows where the bidding is up to and also indicates whether the reserve has been met.
Once the reserve is met, all parties are made aware through an onscreen and SMS alert.
Bidders are also notified when they are the highest bidder and when they have been outbid.
Once an auction reaches the reserve, and the auction enters the final call stage, any bids placed will reset the countdown clock to five minutes, ensuring all prospective bidders have a fair final opportunity to bid for the property.
At the fall of the virtual hammer, the highest bidder above reserve wins the property.
They then have until the close of business the following day to transfer the deposit.
Should the auction fail to meet the reserve, the reserve price is automatically revealed to the highest bidder who is then offered an exclusive one-hour negotiation period with the agency and vendor involved.
David explains this unique feature has been proven to encourage bidding, as only the highest bidder gets this opportunity.
Meanwhile, all of the systems in the SoldOnline platform have been designed to not only meet legislative compliance but to offer a sales process that features true transparency.
“There is no system, including the traditional auction process, that is as transparent as our system while offering anonymity to the buyer and relieving that stress,” David says.
With more than 800 auctions currently to its name, the reputation of SoldOnline is steadily growing, and the results speak for themselves.
So far, the platform has sold everything from car spaces to major development sites, residential homes, and commercial properties.
The cheapest property sold was a car space for $12,500 while the most expensive property purchased was an $8.1 million Sydney development site that sold $3.1 million over the reserve.
The highest property offered was a rural irrigation block for $24 million and the largest portfolio sold was 56 blocks of land in Gymea.
“One of my goals was to create a transparent, compliant platform that took the stress out of the auction process but allowed people to put their properties to auction in areas which would normally not be auction viable, and where properties sit on the market for months and months,” David says.
Ultimately, he believes buyer demand and agency understanding will drive the growth of SoldOnline in the immediate years to come.
“Buyers will drive the demand,” he says.
“So much of the real estate process is already online. It’s just the transaction piece which is offline. Once the innovative portion of agents start to do that, the others will follow.
“We are very firm in our belief that this is an alternative. It is an opportunity for agents to differentiate.
“This is a tool for the agent’s toolbox that is a very efficient way for agents to employ their time.”
For more information, visit soldonline.com.au