UN­DER THE HAM­MER

HOW AUC­TIONS CAN BEN­E­FIT SELL­ERS IN A BUYER’S MAR­KET

In Flight Magazine - - TOTALLY TASTY -

The June FNB House Price In­dex re­flected a -2.0 % yearon-year rate of house price growth in May, af­ter a re­vised -2.1 % in April when ad­just­ing for CPI (Con­sumer Price In­dex) in­fla­tion.

Ac­cord­ing to Roy Lazarus of Park Vil­lage Auc­tions (PVA), this means that: “Sell­ers are of­ten faced with the de­ci­sion to ei­ther stay put or ac­cept of­fers that are lower than their in­tended sell­ing price – per­haps even at a po­ten­tial loss – if the sale comes down to ne­go­ti­a­tions with a buyer.”

Peo­ple look­ing to sell in a “buy­ers’ mar­ket” turn to auc­tions mainly be­cause of the swift na­ture of the trans­ac­tion – hag­gling is elim­i­nated and as­sets are re­alised al­most im­me­di­ately. This brings the en­tire sales process to fi­nal­ity much quicker with­out any sus­pen­sive con­di­tions.

Says Lazarus: “It is a method of con­gre­gat­ing all the buy­ers in one spot at one par­tic­u­lar time, with­out the in­con­ve­nience of buy­ers be­ing brought one at a time over a pe­riod of months.

“Sell­ers are not re­spon­si­ble for any com­mis­sions, and there are no fur­ther in­ter­ac­tions be­tween buyer and seller af­ter the sale be­cause all con­di­tions are stated up­front be­fore the auc­tion and have to be abided with. An auc­tion is not a sus­pen­sive sale or con­di­tional, it should be trans­par­ent so that buy­ers can weigh up the op­tions and de­cide on the spot. At the end of the auc­tion, on the fall of the ham­mer, the deal is fi­nal and the pro­ceeds are made avail­able to the seller in a much shorter time.”

But Lazarus ad­vises that while auc­tions are ad­van­ta­geous for sell­ers in many ways, fac­tors such as a prop­erty’s lo­ca­tion will still in­flu­ence how the auc­tion per­forms: “Buy­ers will do their home­work ahead of time and have an in­di­ca­tion of what sim­i­lar prop­er­ties fetch. It is im­por­tant for sell­ers to set a rea­son­able, mar­ket-re­lated re­serve price.”

For auc­tion re­lated in­for­ma­tion, con­tact Park Vil­lage Auc­tions on +27 11 789 4375 or visit www.parkvil­lageauc­tions.co.za.

IN THE WAKE OF THE COUN­TRY EN­TER­ING ITS SEC­OND RE­CES­SION SINCE 2009, CON­SUMER CON­FI­DENCE CON­TIN­UES TO PLUM­MET, AL­LOW­ING THOSE IN THE FI­NAN­CIAL PO­SI­TION TO PUR­CHASE PROP­ERTY TO PLACE DRA­MATIC DOWN­WARD PRES­SURE ON PROP­ERTY PRICES.

Sell­ers can elect to sell their prop­er­ties via auc­tion, which has proven ef­fec­tive in achiev­ing fair sales prices in a “buyer’s” mar­ket.

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