According to Bill Rawson, Chairman of Rawson Properties, auctioneering is by no means superior to other marketing methods, although it does offer certain benefits to the specialised buyer.
"Auctioneering is extremely successful in a seller?s market and can also create market awareness in less active markets by attracting opportunistic buyers," says Rawson.
The preparation that a buyer does in the run-up to the auction is imperative.
"The potential buyer must do his homework. The auction allows him to do this in his own time, as he is not competing with other buyers on the open market. The auction takes place on a predetermined date, which gives the buyer the chance to get his finances in place ahead of time."
This element of certainty differentiates it from the unpredictability of normal industry practices and is a fundamental benefit of the auction approach. Peter Southey, Rawson Properties franchisee for Knysna, agrees.
"An auction gives the seller significant exposure for his property and tells the market that the seller is committed,? says Southey.
Buyers are also able to get pre-approved finance from the banks, provided that the banks can find value in the property on auction: "As with most other property transactions, buyers must be able to put down 10 percent of the purchase price."
Southey explains that, as in the case of other property transactions involving agents, commission is always negotiable: "The binding bid is another negotiable factor and the sole mandate on the property is for 60 days, as opposed to the customary agents? 90 days. All costs are agreed at the signing of the mandate."
Rawson adds that auctions are ideal for determined buyers who have their heart set on a specific property: "It is designed for people who don?t want to miss out on the chance of owning a specific property and encourages them to compete with each other.
"A skilled auctioneer will use his charm and personality to leverage the buyers? participation, ensuring that there is a favourable bidding climate."
Auctioneering is still a relatively unknown marketing method in South Africa, and consumers should familiarise themselves with the terminology used to avoid misunderstandings.
For example, when an auction house displays the word "Gone" on a board, it doesn?t necessarily mean that the property has been sold. It simply means that the auction date has passed or "gone".