A four-bedroom apartment in The Green Community in Dubai could be snapped up for as little as US$50 (Dh183) if sold successfully through an online auction. Steve and Arti Halligan, who plan to return to the UK after 18 years in Dubai, have struggled to sell their home since the start of the downturn so they have put it under the hammer on Humraz.com, a website set up in the UK that is offering a revolutionary way to sell property.
Each bidder pays between $50 and $100 for a "seat" to take part, depending at what stage of the process they register. When enough bidders have registered to cover the property's value, transfer fee, commission for the website and a charitable donation, the auction begins. But the Halligans need to attract 10,000 bidders before this can happen. Bids can range between Dh6 and Dh151,000. Unlike a traditional auction, the home will be won by the person who bids the lowest, not the highest, with the catch being they have to choose a figure that has not been chosen by anyone else.
A number of struggling sellers in the UK have used the site but this is the first home in the UAE to be auctioned on it. Each bidder has 100 chances to make the lowest unique bid but regardless of the price the winner chooses, the cost of the seat is all they pay. "The bid price just determines who wins you get it for the price you paid for the seat," Mr Halligan said. The Halligans hope to sell the property for what it was worth at its peak in the middle of last year, which was as much as Dh3.8 million.
Property prices across the emirate have since fallen by as much as 40 per cent, with further declines predicted. "We don't think we'll get anywhere near the kind of levels we want by selling it through the traditional method plus I think this is an interesting project," Mr Halligan said. "I'm a cautious person so I spent about six months thinking about it, but feel very comfortable with it." If the property fails to attract enough bidders, then it is taken off the website after about six months, with no cost to the seller or bidders. Bidders pay for their seats only once the auction begins.
Because of the element of skill involved, the UK's Gambling Commission has ruled the auction as a competition and not a lottery, therefore negating the need for a special licence. For properties sold through the site in the UAE, the buyer and seller must follow local property transfer regulations. Three traditional auctions have taken place in Dubai over recent months, with each failing to make a sale.