Online bidding for a house is becoming increasingly common in the Netherlands. Where you used to have to fill in a paper form from the estate agent, nowadays you can place a bid for your dream house on your phone. But how does this work and what are the different methods? In this article we explain everything.
What is the difference with the 'traditional' method?
It used to be that every estate agent had a different way of bidding. Where you had to leave a sealed envelope with one broker, you could easily send an e-mail to another broker. For first-time buyers, this could be difficult because there were no requirements for the details of your bid. Bids therefore ranged from merely providing information about a purchase price, to fully specifying the conditions. Ultimately, therefore, it can be difficult for estate agents and sellers to find the ideal buyer.
With the advent of online bidding, this is a thing of the past. With online bidding, all candidates can leave the same information for a bid. This makes it a lot easier for the broker and seller to compare candidates.
Forms of online bidding
Two forms can be found in today's housing market, these are usually referred to as "open" or "closed. An open system is best compared to auction platforms such as Marketplace or Holiday auctions. All candidates can publicly view each other's bids and bid until a closing date. A disadvantage can be that people can also make fake bids to drive up the price, according to research by the Consumers' Association.
Closed bidding is now by far the most common. With this method, there is also a closing date, but the bids remain secret. The system of Eerlijk Bieden has digitised the closed bidding process. By means of the 'digital notary', bids are stored in a digital safe and the entire system is logged in a bid log.
Experiences in practice
To date, there is little insight into the difference in results between the various forms. Because the phenomenon is still relatively new, researchers have too little data at their disposal. In addition, in an open bidding system, a 'starting price' is usually used. This means that only bids above this price are accepted. The closed system uses a regular 'asking price'. Candidates are then completely free to decide what they bid. A real comparison between the two methods is therefore difficult.
For sellers, the right to award contracts is becoming increasingly important in the current market. In addition to price, the motivation of candidates is therefore becoming increasingly important. Within a closed system there is therefore more room to leave a motivation. Motivation can take the form of, for example, substantiating your reservations or a personal message to the seller.
What does this mean for me?
For the consumer, both selling and searching, the overall process will become much more transparent. Bids are automatically logged regardless of the system, leaving no room for tampering. All activities in the sales process are described in the bid log. The process is therefore always verifiable by the candidates.
For brokers, online bidding probably means primarily time savings through automation. Because bids are received centrally in one place, there is no more need to worry about searching and forwarding e-mails. In addition, standardized bidding makes it easier to compare candidates. This makes advising the client easier. Read about the experiences of Pooters Makelaardij in the blog series Makelaars aan het woord.
Mandatory online bidding in 2023
With the requirement for brokers to use the bid log as of Jan. 1, online bidding appears to become the norm in residential brokerage next year. In doing so, many major differences can be noted compared to last year. In the current housing market, for example, it can be seen that open auctions, which were still going strong until March 2022, are being used less and less by sellers. Sharp increases in interest rates and exploding gas and electricity prices have caused the housing market to cool down.