Tips in Buying & Selling Properties by Auction

An auction, be it for a property or pots and pans, can often seem frantic and confusing to the inexperienced. However, an auction is simply a mechanism of sale and if you understand the process, whether you are a buyer or seller, participating in a property auction can be stress free and actually quite enjoyable.

Tips in Buying & Selling Properties by Auction

By Scott McNair – In2assets Properties

An auction, be it for a property or pots and pans, can often seem frantic and confusing to the inexperienced. However, an auction is simply a mechanism of sale and if you understand the process, whether you are a buyer or seller, participating in a property auction can be stress free and actually quite enjoyable.

Selling

A property auction starts with a property owner approaching an auction company or broker (or Business Development Executive – BDE – as we’re known at In2assets) with the property they wish to sell. The BDE will then conduct a market assessment to ascertain the saleability of the property and then recommend a reserve price to the seller. Once both the seller and BDE are satisfied that the property is both saleable and priced right for the market, a sole mandate will be signed between the seller and the auctioneers.

It is at this stage that the BDE will put together and execute a comprehensive marketing strategy which should run for about 5 weeks prior to the auction in order to attract any potential buyers. This process should hopefully culminate in active bidding and a conclusive sale at the auction.

Buying

If the marketing campaign has done its job, a potential buyer will come across a property that interests them either online, via a board, through a printed advert or through a direct introduction from the BDE. At this stage the buyer will request all of the relevant info on the property which the BDE will have compiled.

If thereafter the seller is interested in purchasing the property, they would need to register for the auction. Registration entails a registration deposit being paid (at In2assets this is a refundable R50k deposit) and FICA documents being submitted.

The Auction Day

On the day of the auction, buyers will gather at the auction venue and collect bidder’s cards in preparation for the sale. At the advertised time, the auctioneer will start the auction by going through the property particulars before calling for bids from the buyers. Once all bids have been submitted and no further raises are offered, the auctioneer will knock the property down to the highest bidder.

If the reserve price has been achieved or if the sellers are present, the auctioneer may confirm the sale there and then. If the highest bid is below the reserve price, the auctioneer will advise the buyer that the sale is “subject to confirmation”, which means that the seller can then decide whether to accept or reject the offer within a prescribed time (at In2assets we allow 24 hours).

And that in a nutshell that is how an auction sale is done. It really is a straightforward and transparent transaction which allows buyers to compete on a level playing field and sellers to realise the market value of their property.

To sell your property by auction, contact Scott McNair on 082 830 5208 or smcnair@in2assets.com

 

Posted by In2Assets