Ben­e­fits of sell­ing, buy­ing on auc­tion

Weekend Argus (Sunday Edition) - - OPINION -

THE mis­con­cep­tion that auc­tions are re­served for dis­tressed prop­er­ties, or are hunt­ing grounds for bar­gains, is steadily be­ing cor­rected as more peo­ple opt for the auc­tion floor, says PJ Veld­huizen, man­ag­ing di­rec­tor of Gil­lan & Veld­huizen.

“The auc­tion process has seen much suc­cess in the prop­erty mar­ket for many year. Sell­ing on auc­tion could re­alise more for your as­set be­cause of its com­pet­i­tive mech­a­nism.

“It pro­vides the seller with fair mar­ke­tre­lated prices, and cre­ates op­por­tu­ni­ties for buy­ers to ac­quire prop­er­ties at prices they are com­fort­able with,” he says.

Given the fi­nan­cial cli­mate of 10 years ago, many prop­erty auc­tions oc­curred as a re­sult of com­pany clo­sures or liq­ui­da­tions, with cred­i­tors, liq­uida­tors or trus­tees pre­fer­ring to use the auc­tion method to dis­pose of as­sets, he says.

“Bank­ing in­sti­tu­tions have for many years used the auc­tion process to sell prop­erty, based on its trans­parency and other fac­tors, and have achieved ex­cel­lent results. These results are achieved through a larger pool of buy­ers and in­vestors, with low cost to cred­i­tors.”

Lack of fi­nanc­ing is a com­mon hur­dle to sell­ing prop­erty out of hand as a high per­cent­age of deals may not be ap­proved by fi­nance com­pa­nies, Veld­huizen says.

“Auc­tions open up the mar­ket for a seller on a cash and voet­stoots ba­sis, with qual­i­fied buy­ers com­ing fully pre­pared to make prop­erty in­vest­ments.

“While buy­ers may still ob­tain fi­nance to pay for the prop­erty, mak­ing the pur­chase is not sub­ject to them ob­tain­ing fi­nance.

“The savvy seller or in­vestor knows the auc­tion route can be in­stru­men­tal in achiev­ing a bet­ter price where good de­mand ex­ists, or pro­duc­ing a re­sult for a seller where no de­mand ex­ists. In par­tic­u­lar, auc­tions are able to pro­duce a sale when a seller re­quires ur­gent dis­posal.

“You have a process that is strictly reg­u­lated and trans­par­ent and of­fers in­stan­ta­neous results, as well as value for money for the buyer and the seller.”

This Wyn­berg prop­erty, to be auc­tioned by Raw­son Auc­tions Western Cape on Jan­uary 24, com­prises a let­table four-bed­roomed house and three ad­join­ing shops that are cur­rently let.

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