Why property auctions are so successful

Posted On Wednesday, 26 July 2006 02:00 Published by
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The auction method of selling a property virtually guarantees a sale

The auction method of selling a property virtually guarantees a sale - if not on the day of the auction itself, a sale is most likely concluded in the period immediately following the auction, says Paddy Smuts, CE of Pam Golding Commercial Auctions.

"Of the 10 properties we most recently auctioned, each one resulted in a sale, although approximately half of these were concluded by private treaty after the auction. This in no way detracts from the success of the auction, on the contrary, the successful sale is concluded due to the auction process, whereby a concentrated marketing effort results in maximum exposure for the property and brings together all serious, interested buyers.  It also results in the achievement of a true market-related price for the property, with keen buyers bidding against each other. In many instances even prior to auction we already have confirmed buyers at the reserve price," says Smuts.

He says sellers should also be aware that in some instances, selling their property on a multiple auction is not always the correct method.  "In fairness to both the seller and the buyer, each property should be considered and treated on its own merits and a decision made whether to auction the property individually, on site, in a scenario where all the buyers are there for that specific property, and able to assess the property and all its attributes, or on a multiple auction. A multiple auction is appropriate when the property is not that accessibly located ie away from major centres, if all its attributes cannot be easily portrayed at the auction presentation, or if the property does not lend itself to accommodating a crowd of people on site. Ultimately however, the choice of venue and method of auction rests with the seller," he says.

Smuts says another method of selling a property is by tender.  In a situation where the seller wants to achieve the maximum, market-related price but without putting him- or herself under undue pressure to sell, the tender method is appropriate.  A recent example is that of the V&A Waterfront, which has aroused much media debate in regard to its true value, where tenders were called for.  However, the tender method is not necessarily as conclusive or 'guaranteed' a method of selling a property as an auction, he says.

A mix of commercial properties - including business, retail, industrial and hospitality - and a residential property, ideal for use by a professional person, recently successfully sold on auction through Pam Golding Commercial Auctions, achieving sound returns for the sellers.  These include an industrial property in Montague Gardens sold for R1.225 million, a commercial property in Muizenberg sold for R2.84 million, a property used as a guest lodge in the Bo-Kaap sold for R6 million (a record price for the area), a prime located residential property in Rondebosch sold for R2.04 million, a property used as a guest lodge in Milnerton Ridge sold for R3.9 million; and a prime located commercial property in Koeberg Road sold for
R2.55 million (a record price of R2281 per square metre).

For further information or to discuss the advantages of selling property by auction contact Paddy Smuts of Pam Golding Commercial Auctions on 082 415 7730.

Publisher: Pam Golding Commercial Auctions
Source: Pam Golding Commercial Auctions

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