In 2021, Approximately 5% of Real Estate Sales were transacted using online bidding platforms. Some experts expect this to grow to 25% in the next five years.
- Fast way to sell a Home. They operate on a set time frame, at a set price. The Time frame is set out in advance. The Marketing Period is short and sharp. Another factor that contributes to the speed is that Buyers are pre vetted before placing an offer and a buy in from the buyer is required in order to bid – this contributes to serious buyers instead of speculators and window shoppers.
- Eliminate Long Negotiation Periods. Purchasing and closing dates are known. Buyers know they are competing fairly and on the same terms as all other buyers.
- Offers are non suspensive. The suspensive conditions in an offer to purchase suspend the progression of the sale until all terms are fulfilled. The most common suspensive condition is financing. With an Auction, the sale is not contingent upon the buyer being able to obtain mortgage finance, or having to first sell his existing property.
- Competitive Bidding. Because of the limited, pre determined time frame that is created for an Auction sale, a fear of loss is created amongst buyers. The Motto of Time kills deals is in action. This limitation for the best man or woman to win can create competitive bidding, often fetching more than asking for Trophy Properties.
- Auctions are not a Private Treaty Sale like conventional sales. In a conventional sale, the Agent may have control over the buyers and offers presented to the Seller. With a Live/online timed Auction there is a good mix of Buyers with no control over the one that achieves the best price. The buyer could be anyone and their circumstances might change at any time, this is why so many private treaty sales fall through, or at best why offer prices are reduced at the last minute! The private treaty buyer could delay progress for a couple of months, then show some signs of proceeding and go on like this until the seller finally changes their mind and tries to find another buyer.
For more info on Selling or Buying on Auction, visit auctions.century21.co.za