Who Should Sell their Property via the Auction Route?
The misconceptions that auctions are reserved for distressed properties or that it is a hunting ground for bargains is steadily being corrected as more and more people opt for the auction floor as opposed to traditional real estate channels. The auction process has seen much success in the property market for many years and selling on auction can realise more for your asset due to its competitive mechanism. It therefore aims to provide sellers with fair market related prices as a minimum, achieved in a short space of time.
Then and Now...
Given the financial climate 12 years back, many property auctions occurred as a result of company closures or liquidations where the creditors, appointed liquidators or trustees preferred to use the auction method to dispose of assets. Banking institutions have for some time been using the auction process to sell property successfully, based on its transparent and arms-length process and have achieved excellent results. These results are achieved through a larger pool of buyers and investors, with a low cost to creditors.
Popularity of Property Auctions
The number of auctions has increased by 300 percent over the last few years and auction attendance has increased by over 200 percent over the same period. When Australia experienced their property boom, their residential property sales method - which until then had been predominantly by private treaty - metamorphosed into the auction system.
Auctioning your Property with FIRZT
- We prepare a proposal for you with regards to selling your property on Auction.
- Our FIRZT Auctions Exclusive Sole Mandate is drawn up. (Contact us for a draft version)
- Auctions can be hosted on-site or off-site, as well as part of a multi-property Auction where possible to attract more buyers.
- Your Auction day and time is then scheduled - we recommend 4 weeks from date of Mandate.
- We then create and run a bespoke marketing campaign to suite your marketing budget. Our campaigns include, but are not limited to, a large on-site Auction board or banner, street pole posters, personalised digital marketing to our extensive existing Database of buyers, boosted paid ads on social media, advanced Google Ads marketing, website portal featuring and marketing across the FIRZT website, Property24, Private Property, IOL and ImmoAfrica.
- The marketing campaign commences from date of Mandate.
- A bespoke Bidder's Information Pack is prepared and attached to your online property listing.
- Our brokers may request limited viewings of the property prior to the Auction.
- Registrations for buyers to Bid begins 1 hour prior to the start.
- Online and telephonic bidding is conducted as necessary.
- A certified and registered Auctioneer will conduct the Auction
- On the day, the highest Bidder signs our Auction Sale Agreement and immediately pays a 15% Down Payment into our Trust account.
- If the highest Bid is equal to or exceeds the reserve price, the property is SOLD!
- If the highest Bid is below the reserve price, you have a 3 day confirmation period to accept, counter or decline the offer.
- The transfer process is generally quicker due to the nature of the condition-free terms of the Agreement of Sale.
FYI
Auction sales are final and binding and cannot be subject to any suspensive conditions i.e. subject to financing or the sale of the purchaser's property.
A purchaser has 21 working days to provide guarantees for the full Purchase Price.
Please see our Auctions dropdown menu on our website for more information regarding the Rules of Auction, the Auction Day Process and much more.
Fee Structure
Other than the agreed contribution to marketing expenses there is NO COST to you, the seller. The purchaser pays a Buyer's Premium of 10% plus VAT (i.e. 11.5%) over and above the "Bid Price".
Who sets the Reserve Price?
You do! But our brokers are there to advise you of a realistic Reserve (net selling) Price for your property based on market related conditions, comparable sales in the area, and other factors that will influence the price. Buyers are never made aware of the Reserve Price.
Qualified Buyers
Normally, lack of financing is a common hurdle to selling property out of hand or through an agent, where a high percentage of deals may not be approved by finance companies or banks. Auctions open up the market for a seller on a cash and "voetstoots" basis with qualified buyers coming fully prepared to purchase a property at an Auction. While buyers may obtain finance to acquire property, contracts may not be subject to them obtaining finance or subject to them selling their home or another property.
Voetstoots Applies
Section 55 of the Consumer Protection Act - A Consumer's Right to Safe, Good Quality Goods - does not apply to goods bought on Auction. The basic purpose of the "voetstoots" clause is to protect the seller from any action by the buyer (on discovering any defects the seller was not aware of when transacting) to jeopardize the sale contract. But it is important to note when the consumers' rights, provided by Section 55, do not apply to a transaction.
All about Results
The savvy seller knows that the Auction route may be instrumental in achieving a better price where good demand exists, or producing an acceptable result for a seller where little demand exists. In particular, Auctions aim to produce a sale where a seller requires urgent disposal, or when traditional marketing and sale methods have not been able to produce any significant result. In short, you have a process that is strictly regulated, transparent, and offers quick results!
CONTACT US TODAY!
(+27) 011 731 0300
(+27) 084 440 5016 (whatsapp only)