Selling your property?
Although interest rates are coming down, many sellers sit with their properties for much longer because sales are either slow or there are too many bargains to choose from.
The FNB Property Barometer Q4 2008 said the length of time a property remains in the market has shifted from a peak of 20 weeks and one day to an average of 15 weeks and three days, this is by far the most significant drop since the Barometer's inception in 2004.
However, these stats offer very little consolation to sellers who want to sell quickly.
Selling options
In the table below Herschel Jawitz, CEO of Jawitz Properties explores sale by private tender, Marcus Erasmus, estate agent at Bergkruin Properties in the Free State looks at traditional methods and Jonathan Smiedt, CEO of ClareMart Auction Group, Roy Lazarus, director of Park Village Auctions and Barney Jacobsen examine auctions.
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Advantages |
Disadvantages |
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Sale by private tender |
•· It incorporates best selling methods of estate agents and auctions. •· It has a time limit in which the property should be sold. •· Because the process is not transparent, buyers are forced to put their best offer forward as they do not know who has offered what. |
•· Buyers have a short time to make a decision because of limited viewing days. •· There might not be an offer acceptable to the seller. •· Buyers never know who they are bidding against in terms of price, so they are not in a position to choose how much they bid for. |
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Sale by estate agent |
•· Seller gets a personal service and is treated like the only client. •· Safety is guaranteed as the agent will screen and prequalify potential buyers to view property. •· Estate agents are an integral part of selling property as they understand legal terms and the property market. |
•· Commission has to be paid to the agent for selling the property. •· It is costly to pay for advertising and marketing costs of the property. •· The agent doesn't always have the incentive to get the highest price for the property.
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Sale by auction |
•· Property purchases are not subject to bond approvals. •· Transparency- because auction is a live process, bidders know at every stage of the auction what the highest bid is. •· The buyer must pay the commission and is responsible for all the costs in the transaction. |
•· Buyers are often scared of bidding because they are not familiar with the process. •· They may be an oversupply of stock and the seller may miss the opportunity to sell when there are a lot of bargains. •· Sellers may have to pay advertising costs although it often depends on the arrangement a seller secures with the auctioneer. |
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Comments
The method 'sale by private tender' is being used more frequently by estate agents (Pam Golding, Jawitz to name a few) on properties that they have been trying to sell the traditional way for months. This is no different from selling a house normally but . .more
by Frank furta on May 22 2009, 09:51
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