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.
How to Auction your property with FIRZT
- A FIRZT Auctions broker will prepare a Proposal for you with regards to selling your property on Auction.
- You then need to sign and accept the FIRZT Auctions sole mandate.
- We then schedule your auction i.e. date and time (we recommend 4 weeks from date of mandate)
- We will then design a marketing campaign together with you to suite your marketing budget. Our marketing mediums and types include, but are not limited to. Large on-site Auction board, street pole posters, banners, flyers, personalised digital marketing to our extensive existing Database of buyers, social media channels include Facebook, Instagram and LinkedIn, sophisticated Google Ads marketing, website portal marketing including the Firzt website, Property24, Private Property, IOL, ImmoAfrica, and the South African Institute of Auctioneers Website (we are members of SAIA).
- The marketing campaign commences from date of Mandate.
- A bespoke Bidder's Information Pack is prepared and attached to your online property listing.
- Your Auction day has finally arrived..
- Only highly qualified Registered Auctioneers will be used to Auction your property.
- The highest Bidder signs our Auction Sale Agreement and immediately pay a 15% Down Payment into our Trust account.
- The Agreement is then presented to you, the seller.
- If the Bid is equal to or exceeds the reserve price, the property is SOLD.
- if the Bid is below the reserve price you, as the seller, has a 3 day confirmation period to accept, counter or decline the offer.
- Auction sales are final and binding and cannot be subject to any suspensive conditions i.e. subject to finance or the sale of the purchaser's property.
- The buyer has 21 working days to provide guarantees for the full Purchase Price.
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?
Our brokers will advise you of a realistic reserve price for your property based on market related conditions, comparable sales in the area, and other factors that will influence the price.
Qualified buyers
Normally, the 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 and therefore fail, leaving the seller without a result. Auctions open up the market for a seller on a cash and "voetstoots" basis with qualified buyers coming fully prepared to purchase property. While purchasers may obtain finance to acquire the property, contracts are not subject to them obtaining finance, or subject to them selling their home or another property.
Voetstoots applies
Section 55 of the Consumer Protection Act - 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."
The price is right
The savvy seller or investor knows that the Auction route is instrumental in achieving a better price where good demand exists, or producing a result for a seller where no demand exists. In particular, Auctions aim to produce a sale where a seller requires urgent disposal, when traditional marketing and sale methods have not been able to produce any significant result. Auctions show a higher confirmed sale rate than that shown by traditional disposal methods. In short, you have a process that is strictly regulated, transparent, and offers instantaneous results, as well as value for money for the buyer and the seller who retain control, can make informed decisions and have the right to set their price at an auction.
CONTACT US TODAY!
(+27) 011 731 0300
(+27) 084 440 5016 (whatsapp only)
auctions@firzt.co.za