The perks of selling property on auction

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Jaco du Toit of Park Village Auctions shares how one can leverage the perks of property auctions to maximise the benefits that the exemption brings.

“As of 1 March 2020, buyers are exempt from paying transfer duties on properties that cost R1 million or less. Transfer duties are taxes levied on immovable property as per the Transfer Duty Act,” says du Toit.

“The adjustment will help first-time buyers enter the property market, in turn, boosting the sector overall. Existing property owners may also want to take advantage of the savings offered by the increased thresholds. That’s where auctions present a favourable way to counter-act what is, at the moment, as a buyers’ market.”

Today, many freely choose to sell their assets at auction, given the inherent benefits associated with this method of selling.

The following are just a few of the advantages those seeking to sell their assets should keep in mind:

• Quick turnaround time: An auction is immediate; taking place and completed at a set time. In other words, sellers don’t have to wait indefinitely on offers after countless show days. Better yet, the process is further streamlined as suspensive conditions (such as bond finance, for example) don’t apply at auctions.

• Cash in hand: More and more people are turning to auctions to unlock cash quickly by converting unwanted assets into cash. Once sold, sellers receive the proceeds received within a very short time, which frees them up financially.

• Greater reach: Live, online bidding brings more bidders to the auction. Anyone in the world can participate in real-time. PVA reports a favourable response from international investors.

• Comprehensive marketing: Part of successfully conducting an auction is marketing it in such a way that it will grab the attention of as many bidders as possible. Generally speaking, and certainly, in PVA’s case, auctioneers possess a comprehensive database which they use to market assets. Pamphlets, online mailers, newsletters, websites and outdoor banners are all examples of the type of marketing tools which can be used to great effect

• Buyers come prepared to buy: Bidders typically attend auctions intending to purchase and ensure they have the funds to do so. This is particularly advantageous in terms of real estate auctions as buyers have to pay a deposit to bid which goes a long way toward weeding out those who aren’t serious about buying

• No haggling: There are no negotiations. When buyers bid, they do so in the knowledge that they are committing to buy the asset at the price for which they put up their hand. They know, as well, that they must have a deposit available.

• Bidding wars: While auctions typically deliver fair market value, the price of an asset occasionally gets driven up still higher by people caught up in the competitiveness of the moment - referred to as ‘auction fever’.

• Strong demand: No matter the economic climate, there will always be those on the lookout for quality goods.