|A KZN estate agency is using public tenders or ‘silent auctions’ as a way of recruiting serious buyers and achieving the highest price for the seller in the shortest possible time, without the inconvenience of on-going show houses.|
William Campbell, principal of Lew Geffen Sotheby’s International Realty, Umhlanga and Berea reports increased demand by homeowners to sell their properties by public tender.
“The inconvenience of show houses, coupled with the ongoing invasion of privacy while homes are on the market at inflated prices, has seen the popularity of selling by tender escalate to the point where it’s quite usual to have 100 or more visitors at a preview.
“Of these, around 80 percent are willing and able buyers,” he says,
Describing the public tender process as similar in concept to an auction, but silent, Campbell says strict criteria apply when placing properties on tender. Among other factors, the property has to be new on the market, the reserve price has to be realistic and the urgency factor has to be there.
When selling on public tender, the owner is at liberty to set a reserve price and withdraw his property at any time, adds Campbell. The reserve price remains top secret although agents can offer advice on general market conditions if asked by prospective buyers.
“Instead of Sunday show houses and midweek viewings, the seller chooses a specific date and time for all prospective buyers to view the property at once. Sealed bids are placed in a box during the tender period and when the final day arrives, bids are opened and the seller either chooses the best offer or begins negotiating with select bidders.”
Only bids backed by bank guaranteed cheques, cash or cash and bonds are accepted, which knocks out all subject-to offers. Campbell says that 85 percent of all properties sold by public tender realise the seller’s asking price and sell far more quickly than properties on the open market. Also, in direct contrast to the traditional market, the buyer pays the commission and transfer duty in most cases.
“Selling by tender creates hype around the sale of a property says Campbell, “where the buyers wait for the preview”.