By Ikenna Lansar Aghaji
Like the traditional market where a commodity’s final selling price is based on the decisions of two parties (the seller’s marketing skills and the buyer’s bargaining prowess), transactions via an auction also confers the same authority on the potential buyers and seller of a particular item. In an auction market, however, items usually have multiple prospective buyers who are in a simultaneous race to outbid each other. The range of items that can be sold in an auction is almost limitless; arts, antiques, collectables (in all of their forms), confiscated properties (by government agencies), liquidated assets, and real estate properties to name a few. Contrary to popular opinion, auction sales are not always the last resort for sellers.
Virtually all types of properties are suitable for sales in an auction provided the reserved price is realistic and you are guided by an experienced real estate auctioneer. Nonetheless, it is still advisable to always consult an auction firm (who may also be licensed real estate valuers) to learn about the necessary process required to guarantee a worthy sale.
Below are a few of the reasons why you should consider selling your property in an auction:
- It creates bidding rivalry among buyers: Unlike the other medium of sales where buyers attempt to bargain below the benchmark price, auction creates a bidding war among buyers of similar interests. This bid can quickly escalate when you have the right type of audience and an experienced auctioneer who knows how to invoke people’s interest in a commodity. The higher the intensity of the bid, the higher your chance of selling above your reserved price.
- It saves time and money: while a seller might be lucky to easily turn over a property by opting for other means of property disposal, auction sales have proven over time to be a faster medium of sales. Also, the highest bidder usually has a payment deadline which must be adhered to. By so doing, the seller would have significantly reduced the maintenance cost of holding on to a property for a longer period.
- It attracts genuine buyers: Interested individuals might start contacting you or your real estate manager immediately you inform the general public about your decision to sell your property. Even with the infusion of the best marketing tips, intermittent visits from prospective buyers of varying interest might be the only thing the property will be getting for a long while. By opting to sell via auction, your chances of disposing of the property significantly increase since the majority of the people who attend auctions are serious buyers.
- It is legally binding: It is not an uncommon practice for buyers to pull out or attempt to pull out of a property deal. By selling via an auction, the chances of having a failed deal significantly reduces. In an auction, the highest bidder automatically enters into a legal agreement which obliges the buyers to buy the property once he wins the bid. The bidder is required to pay a percentage of the property’s fee (which is usually non-refundable) at the time of sale.
The above does not in any way connote that selling via an auction is a cakewalk; there are due diligence that must be followed if the seller intends to sell for a worthy price and avoid getting burnt. From our wealth of experience as a licensed real estate valuing firm that also organizes auction sale for clients, we have been able to master the art and science of property valuation and the variables that affect its value. As such, we can assist you in setting the reserved price for your property.
The network and coverage we have been able to establish since we started have made it possible for us to quickly reach out to other professionals, builders, developers and many more, who are always on the lookout for properties to buy and private/corporate entities interested in a one-off deal. In other words, our auction audience is only comprised of individuals who fall into the target audience.
In addition to being able to pull active participants to the auction venue, our team members are also adequately skilled in displaying property in its finest state (of course, we must have done our due diligence and fix the fixable before the auction date) and predicting questions that will be asked by potential buyers.
On Saturday 12th of October 2019, we organised an auction sale on behalf of UNICEF, Abuja. With an active participant of over 200 people, we were able to dispose of properties like cars, electronics and furniture in as little as no time.
**Ikenna Lansar Aghaji is the principal partner of Lansar Aghaji & Co a firm of Estate Surveyors, Valuers and Auctioneers.