An increased repo rate is inevitable to curb runaway inflation, much to already-stretched consumer’s dismay. Property experts have already published their forecasts, stating that the number of forced home sales is set to rise. Though not all is doom and gloom, Park Village Auction’s Clive Lazarus says that auctions may offer some relief.
While Lazarus agrees that more property stock will stem from repossessions (as consumers struggle to meet their obligations), electing to sell one’s house via auction presents a favourable way to downscale with minimal loss.
“Don’t allow it to get to the point of repossession. An elective auction is a fast way to realise liquidity and even save,” says Lazarus. He explains that sellers can then leverage the current “buyer’s market” to move to a residence with more manageable bond repayments.
Lazarus elaborates, “The first benefit of auctions sales is that they are fast. There are no delays with waiting for offers and for suspensive conditions (such as “on condition of sale”) to be met. All the bids are contended live on the floor, and the sale is concluded there and then.
“Another benefit is that the starting price goes up, as opposed to conventional real estate where the price is haggled down.
“Finally, with auctions (as opposed to a distressed sale), the buyer pays the commission. At the end—“on the fall of the hammer,”—the deal is final, and the proceeds are made available to the seller in a much shorter time.”
Auctions benefit buyers as well. As rates continue to rise, there will invariably be more bank-appointed sales. Such sales have long been known for making property available at highly favourable prices. This, Lazarus explains, is a good opportunity for first-time buyers to get their foot in the property market and seasoned property investors to grow their portfolios.
“When buyers have done their homework, they can acquire quality homes at much better value than a conventional agent sales because there are no lengthy negotiations and bidders can ‘name their price’,” says Lazarus.
For those curious to learn more about auction proceedings, Lazarus invites them to join. He suggests registering but not participating to see how an auction plays out. The next auction of interest will be held in Morningside, Sandton, on the 24th of April at 11 am as a four-bedroom, architecturally designed townhouse goes under PVA’s hammer. Interested parties can find more details on PVA’s website at www.parkvillageauctions.co.za under reference number 1201.