Auctioneers face dual challenge when auctioning property

"Many tell the same story: they face a dual challenge when it comes to auctioning a property. On the one hand, sellers, despite much media coverage on the subject, still hold onto unrealistic prices and, despite counselling from us and others, often refuse to set attainable reserve prices. In some cases we simply have to break off negotiations rather than to continue to allow them to hope for these unrealistic prices. On the other hand, many buyers attending auctions do so in the expectation of getting ludicrously low prices. It was recently said to me that many sellers still see their buildings as 30% more valuable than the market will pay, while buyers at auctions tend to expect to make a purchase at 30% below market value," says Jovanovski.

One message, that has not yet been assimilated by the public, says Jovanovski, is that reputable auctioneers are usually also exceptionally good valuers and their reserve prices often reflect the right value.

Price very accurately

"On every property sale that we are involved in, says Jovanovski, we will research the sale of at least ten properties sold recently in the area and we will compare these with the national averages, the growth rates for the province as well as the country as a whole. We will also try and assess the extra value given by special features, such as position and proximity to the major hubs and amenities. Taken together, these enable us to price very accurately."

"We therefore take on stock that we know we can sell and by this achieve a high success rate, with both the buyer and seller satisfied with the results."

For a sale to go through, says Jovanovski, not only must the price be right, but, in addition, there has to be a demand for that sort of product in that area - and the owner should always allow the auctioneer to spend sufficient sums to advertise and publicise the property fully.

Most of these conditions are, adds Jovanovski, met when sales of repossessed properties are handled for the banks - and that is one reason why these attract buyers and usually go fast.