Why is selling commercial and industrial property via the auction platform so popular? Benefits explained by Rainer Stenzhorn of In2Assets, the leading South African property company.
Let’s clear the wrong perception in the market
For some reason people associate the word auction with bad debts, distress, liquidation, or other legal implications. This is not the case. About 96% of In2assets Property auctions are private treaty transactions whereby private sellers, portfolio owners, corporate companies, listed funds and other institutions choose the auction platform as the preferred method of sale.
Here are the reasons why: -
An auction sale is Quick – It can take as little as five weeks from signing a mandate to conclude the sale. The entire focus of the sales and admin team is driven by the auction day.
Brochures and marketing material must be produced almost instantly and distributed to the right target market.
The Auction deal is unconditional – unlike with a conventional contract, with an auction sale the seller is in the driving seat and stipulates the conditions of sales. The sale is not subject to a due diligent period, not subject to finance or any other binding conditions that a buyer usually demands in his offer. Buyers will have to do their own due diligence upfront and finance must be in place when the hammer falls.
The property will sell with an undisclosed reserve price – The reserve price is the safety net for the seller, whereby In2assets cannot sell the property if the reserve price is not met. Therefore, the property will be marketed without a “price tag” with the aim to let the market decide on the actual purchase price. In many cases the highest bid exceeds the reserve price. Consequently, a market related reserve price is critical and In2assets in house valuation team will assist with establishing the right reserve price.
There’s no ceiling on the maximum price your property can fetch. Often, this means higher final prices than more traditional methods of sale.
Low-Cost Contribution – The Seller’s marketing contribution payable to In2assets is the only cost to the auctioneer but covers a desktop valuation, assessment of the property, a national marketing and advertising campaign, digital and social media marketing, video coverage, property catalogue production costs, livestreaming of the auction and the actual auction event. The contribution can vary based on the type of property and over 50% of the actual cost will be absorbed by In2assets. But if there’s no successful sale, there’s no commission.
No Commission payable by the Seller – On In2assets Property Auctions the purchaser pays the commission on top of the actual bid price.
A property Auction is Speedy and Efficiency – When the hammer falls, the deal is done: no protracted negotiations, suspensive clauses, or intermediaries.
With our property Auctions there’s a thrill – In2assets Property Auctions have a name in the market to be experienced as electrifying events. It is our job to intensively market our properties, so that the maximum number of prospective bidders and spectators turns up on the day.
Property Auctions are transparent. No deals behind closed doors – In2assets property Auctions takes place transparently livestreamed over the internet and in a public venue, with all terms and conditions available for public scrutiny.
The deals are done on the Day – There’s a high degree of certainty that most property lots on auction will be sold. In tough markets like now, that’s a huge bonus.
Serious Buyers will make the deal happen – Registered buyers are aware that In2assets is dealing with genuine sellers and are prepared with prefinance and available cash deposits to conclude the deal on the fall of the hammer.
Professional Marketing is what drives the transaction – Unlike the conventional approach, In2assets success lies in extensive marketing. Once the right market for a specific property has been established, the In2assets property marketing team works out a marketing plan.
Part of the marketing is to create digital imagery, video footage, property brochures, place digital advertising campaigns and print adverts, social media engagement, blogpost writing and direct calls to a selected database.
If you want to call your property fast, contact us now on email@example.com