'Internet can help clean up property sector'

Posted On Tuesday, 03 May 2011 02:00 Published by eProp Commercial Property News
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The internet may be key in helping the South African property market regain some of its lost confidence, says James Thorburn, MD of Property Auction Online.

 

Nomonde MapetlaConfidence in the South African property sector was shaken earlier this year when it emerged that high-profile estate agency Wendy Mechanik Properties was placed in receivership.

Furthermore, Nomonde Mapetla, the CEO of the Estate Agency Affairs Board, the sector regulator, had her services abruptly terminated with the authority having to appoint auditors to undertake a comprehensive forensic investigation into its operational governance issues.

"Confidence in the property sector has been shaken and there is a need for buyers and motivated sellers to do their transactions in a transparent and confident manner," said Thorton.

Thorton, who has a background in the IT sector and has interests in the property market, claims that his fledgling company, which was commercialised six weeks ago, is the first in SA to offer a full property auction service based on an in-house developed system.

"Seeing the trends in SA, especially with regard to internet usage and the building up of (telecommunications) infrastructure, there is no doubt that the internet will be used more and more for transactions of all sorts," he said.

Thornton said South African estate agents were using the internet as a marketing tool rather than an actual transaction tool.

According to the model developed by his company, a property spends a month in the "pre-auction" phase, where potential buyers can view it, and if they feel motivated enough, place a pre-bid offer. The second phase is when the property is in the auction period for seven days.

"We use seven days so that buyers do not feel the pressure of a normal auction. They can take their time in deciding if they want to bid or not," Thornton said.

He said a buyer could arrange to view a property during the pre-auction phase.

"With this process we can get people to pay market-related rates for properties, rather than find agents trying to up the price so it increases their commissions," Thornton said.

Property Auction Online charges commission of 8% on residential properties and 10% for commercial properties.

Thornton said this made them cheaper than a property auction company, which would usually charge about 10% for a residential property and about the same for a commercial property.

South African estate agents usually charge a commission of 7.5% on a deal, but this can be negotiated depending on the value of the transaction.

Last modified on Monday, 09 June 2014 11:12
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