After considering your options, you have decided that your best bet is selling your residential property by auction. Now what?
How To Sell Residential Property At Auction
Selling residential property is no harder than selling a home through the traditional methods of sale. Simply find a reliable real estate auctioneer, and they will help you on your way.
Contact a real estate auctioneer
The seller must make contact with a qualified real estate auctioneer.
An auctioneer who directly or indirectly advertises that he/she, publicly exhibits immovable property for sale, or on the instructions or on behalf of any other person sells immovable property in South Africa, must be registered as an estate agent with the Estate Agency Affairs Board. Many auctioneers also voluntarily belong to various industry associations who will go to bat for sellers who feel that they have been wronged by one of their members.
The auctioneer will come to the property to value it
The property valuation is actually a comparative market annalysis, unless performed by a registered real estate valuer. This valuation must be based on the recently sold properties in the area that can be reasonably compared with yours.
Use this opinion of value as the basis for setting a reserve price, if any.
The walk-through
The auctioneer or his representatives will do a property walk-through. During the walk-through, the auctioneer is simply taking invitory of everything the property has to offer. This is often done by a video recording.
Set a reserve price
The auctioneer will ask the sellers what price they hope to achieve at auction. This price expectation will form the basis for any auction reserve price that may be set.
Make sure that your price expectations are market value related, because you may otherwise be dissappointed come auction day. Although the auctioneer may value the property and even refuse to accept an auction mandate if a seller's price expectation is too high, the final decision still lies with the seller, and so does the responsibility for marketing expenses.
Choose your marketing requirements
The auctioneer will put together a proposal, detailing the planned advertising and marketing that will be done, as well as the cost of advertising.
The sellers decide on a marketing plan and an advertising fee that suits their needs, keeping in mind that achieving a good price is dependent on having a good bidder turnout on auction day.
Agree and get going
You sign an auction mandate, and set a date for the property to be auctioned off.
Selling Residential Property by Auction
It is easy enough to set the ball rolling for selling residential property by auction, but be prepared for an emotional roller-coaster. The property auction process has been known to make tough men cry. There will be lots of occasions when the nerves will get to you and you will start doubting your decision to sell your home by auction.
Now that I've warned you, you can mentally prepare for this. A well marketed auction is a great way to find the highest price the market is willing to pay for your property. A little emotional anguish is just an unfortunate by-product.
