The adage that you always get a bargain at auction might have changed a little over the last few years, says Christian Stewart, a director of Auction Alliance. Auction firms have been quick to point out to sellers the now obvious point that auctions offer a three-week solution to what so often becomes a long-term problem. The latest statistics on the Atlantic seaboard suggest that the average property takes about 87 days to sell. So does this three-week solution translate into a cheaper price for the purchaser? Stewart believes this question may require some debate.

"There tends to be a bit of a misunderstanding in the market place and still some resistance from some quarters to the auction method of sale. We, in turn, understand this and welcome such debate," said Stewart. "Auctions are a simple, hassle-free, speedy option which work on a very simple premise, that a well-marketed, well-advertised auction will create demand from that sector of the market that the campaign has targeted. "Auctions target both serious buyers and serious sellers. They send a serious signal to the market that the seller is not merely just testing the market at an over-inflated asking price and that, to the contrary, he or she is there to do business.

"To the benefit of the seller, auctions in fact never actually drop the asking price. If the true, inherent market value is there, and the property has been properly exposed by means of the appropriate marketing campaign, then the auction will produce that value." So what then of the purchaser? Does he or she get a bargain? "Each circumstance is different but a few basic principles do apply," said Stewart. "What purchasers must recognise is that if they attend an auction they have in essence qualified the seller (by means of the discussion above) as a motivated seller.

"Motivated sellers are in most cases realistic sellers in terms of their expectations and current market conditions. If this is the case, then the price achieved at auction might well be perceived as a bargain as the asking price, if it had been exposed on the open market, has not been achieved. This is one circumstance. "Another would be when there is specific demand for a certain property, and that demand has necessitated a situation whereby the seller wishes to get all parties together to ascertain in an open, fair and transparent manner which of the purchasers is in fact prepared to offer the best price. "This circumstance would suggest that the purchaser is not getting a bargain. Common sense of course would suggest that he is paying true market value.

"The bottom line is that every time you attend an auction you are giving yourself the opportunity of picking up an asset at a discount to market value. "On the other hand you could just be paying market value or perhaps singlehandedly moving the market to new heights. "That's what makes this method of sale so attractive to so many purchasers and sellers alike." For more information contact Auction Alliance on 021 426 0404.