Competitive pricing critical to selling homes quickly – which is where online auctions deliver
- says Pam Golding Auctions
Wednesday 10th of February 2021
UPDATE: Pam Golding Auctions has just launched its new Online Property Auctions Platform.
Now, more than ever, correct pricing remains the key to maximising the return on the sale of your home, says Anthony Stroebel, Pam Golding Properties head of Strategy & Innovation.
“While trading activity remains brisk across high demand price bands and locations – with stock shortages in some areas, and with this buoyancy likely to continue if interest rates and bank lending criteria remain bullish as anticipated, there is no doubt that right pricing and value is becoming more and more critical for sellers. This trend is escalating as the year progresses as increasingly, buyers and investors perceive there to be good opportunities for sound acquisitions in the marketplace.
Urgency to sell
“That said, there is no question that, given the prevailing constrained economic conditions, many sellers have an increased urgency to sell and are therefore receptive to very competitive market pricing, whereas buyers, on the other hand, are looking for excellent property deals, given their appetite to invest, coupled with an appreciation of the current economic pressures and opportunities that are presented in the market. For example, we are seeing that first time buyers are motivated by the low interest rates while the lockdown has created increased activity among those relocating to more spacious properties in desirable locations where they can work from home while enjoying a better lifestyle.
“The upside for each is that the seller benefits from the likelihood of a cash sale by a specified date – in normally less than a month versus the market average of three to four months – while the buyer makes a property acquisition of his or her choice that represents exceptional value.”
Stroebel points out: “To their credit, sellers are looking for new ways of accessing highly qualified cash buyers, and the prospect of a guaranteed date for an unconditional sale is compelling. We engage with numerous sellers who are utilising this unique online trading strategy because time – rather than their financial situation – is the main driving force for the sale.
“While a number of these sellers are wanting to sell in order to emigrate, some are elderly people who want to retire and move in with or near to their children, and there are also overseas property owners who have already emigrated but wish to sell property here. In other words, they want to move on to the next phase in their life and are looking for a quick solution. There are of course others who wish to divest of a second or leisure property, to simply free up funds for an alternative investment, or alleviate financial pressure via downscaling, or to rent. However, it is abundantly clear that robust pricing and enhanced marketing create significantly increased buyer interest for properties that may have been wallowing in the shadows for some time.”
Adds Tania Smit, head of Pam Golding Auctions: “Encouragingly for sellers, banks are doing their utmost to assist distressed sellers, so we have not yet seen an increase in these properties for sale via financial institutions. At Pam Golding Auctions a great deal of care has been taken to ensure that our catalogue features good quality and high-end homes, thereby moving away from the misconception that auctions are only meant for distressed sellers or dilapidated homes, or that buyers who chance a well-below market value offer may be successful. The bulk of our sellers are out of time, not money, and we are fortunate to have the benefit and backing of the Pam Golding Properties brand which enables sellers to place a great deal of trust in our ability to protect their integrity on the BidX1 trading platform, as well as excellent engagement and counselling in regard to price in order to achieve real market value for properties. This is coupled with our capability to use live market data and analysis to provide up to the minute, relevant insight and advice, coupled with flexibility for buyers, who are able to make pre-auction offers if desired.
“Through this flexibility we are also able to develop a custom-made strategy for every property as the marketing period unfolds and we are able to understand market response. Extremely popular properties may, for example, be taken to auction or even a private auction at an earlier date if we have sufficient buyers, whereas more exclusive buyers wishing to make pre-auction offers are dealt with in terms of one-on-one negotiations between the seller and prospective buyer. Ostensibly, then, the property goes live for sale on the day the catalogue goes live, with numerous opportunities to then make an offer prior, during and, indeed, after the auction, if it does not sell on the day.”
Elaborating further on pricing, Stroebel says it goes without saying that the more competitive the selling price, the greater the chance of selling quickly, as there is a direct correlation between price and time. “The ideal is therefore to find the most strategic and compelling point between the two. Given that auctions occur on a specified date, there is urgency to create, firstly, increased interest among willing buyers, and secondly, to then ensure a platform of competition between them.
“Suffice to say, if there are several buyers competing against each other on the day on a particular property, the closing bid is going to be the most accurate reflection of that property’s true market value at that particular time – bearing in mind that the property market constantly changes from week to week as new properties come to market, while others get sold. The fact is that in a specific buyer’s price range at a point in time, there may well be a number of properties competing with each other and it therefore requires a proper understanding of this dynamic in order to ensure our sellers’ properties are more ‘sellable’ than the others. The auction strategy is ideally suited to this.
Competitive bidding drives up prices
“So yes, certainly, urgent sellers need to price their properties competitively, but if the property is unique and in a highly sought-after location it could well result in a flurry of bidding activity, achieving and even significantly exceeding the seller’s reserve price.”
“Today sellers and buyers – as well as agents – are more empowered through digital platforms and access to information, with ease, convenience, service excellence and urgency key requirements for sellers, while buyers like the access, transparency and value of the online auction process, not to mention the excitement of an immediate successful offer.”
Powered by BidX1, the first two Pam Golding Auctions achieved sales to the value of R60 million comprising some 20 properties, with a sales conversion rate of 50%. Adds Stroebel: “During our December 2020 auction we had a total of 70 000 property page views for just 17 properties and on the Pam Golding Properties website alone we attracted 41 000 page views from 21 000 unique visitors – including both local and international interested buyers. This data affords us excellent market insight in order to consult with sellers on price – depending on the specific response from potential buyers, and to adjust marketing strategy based on an empirical understanding of the efficacy of the various marketing channels such as email, Google display network (GDN), social media and the like. The enthusiastic market response to Pam Golding Auctions has enabled our group to provide both sellers and buyers with a diverse product offering to cater for all requirements.”
With an array of 18 specifically selected properties valued at ‘must sell on the day’ prices, Pam Golding Auctions next online auction takes via the BidX1 trading platform on Thursday 25 February 2021. For further information contact Tania Smit, head of Pam Golding Auctions via firstname.lastname@example.org or visit https://bidx1.com/en/south-africa
Posted by The Know - Pam Golding Properties