Latest Business & Jobs: A Slice of the Auction
Parson Son & Basley say that auctions are not the last resort
Daytime television has gone some way to dispelling the mystery that is the property auction. They have certainly shown that auctions can offer a great opportunity to buy a property at an advantageous price. They have also done much to explain the process involved: the fact that a buyer must have finance in place to complete a deal and that it is very important to view properties in advance as, after winning a lot, there is no going back.
But Richard Payne and Jenni Baker of Parsons Son & Basley’s auction department shed a new light on the whole business and a message they make very clear: “Auctions are not the last resort.”
“We would like to dispel the idea that auctions are simply full of lots that are either repossessions, development properties or unmortgageable properties,” says Richard.
“Auctions are an effective method of selling a property. We are allowed to put a reserve on a property and that reserve price has to be within the guide price that has been listed and advertised. But a property can certainly exceed expectations at auction. It is important that the guide price is set at a realistic level to promote interest and encourage competitive bidding in the room. The result of this action is that most property will sell at over the guide price, providing the reserve is set at a sensible level. This is determined by the amount of interest received in the weeks prior to the auction.
“We should also dispel another myth that a reserve price is the figure the auctioneer will stop at when reached. The fact is, when two bidders are competing against each other, a reserve price can be left way behind, getting the vendor the very best possible result.”
So, have the TV property auction programmes changed people’s attitudes? “Almost certainly on one level, but it does seem to be aimed at people who intend to buy for development purposes or to add to a letting portfolio. We would like people to see that an auction can also be a very attractive way to sell your home if you are a vendor or to buy a home that you intend to live in. The public do need to take a closer look at the auction market to discover there are some real gems.”
So, is buying a property at auction a simple matter? “There are some fundamental differences like having finance in place, having the deposit ready and being aware that if you are successful in the bidding then you have a month in which to complete the payment otherwise you will lose your deposit,” Jenni explains. “We do our very best to guide people in the implications of buying at auction.
“The auction will attract buyers who are there for the purpose of buying property, so from a vendor’s point of view, marketing your home through an auction can be a very attractive way of finding the right buyer. At Parsons Son & Basley we hold between five and six auctions every year; the lots are varied and cover a far wider area than just central Brighton and Hove. We sell everything from garages to whole blocks of flats, and, for many people, property is still seen as being a great investment with a good return.”
Once a property is advertised as an auction lot, it doesn’t mean that there is no flexibility within the sales process. “We can sell a property before an auction if we have an offer from a buyer that meets with the vendors’ approval,” Richard explains.
And can buyers view auction lots in the same way as properties being sold in the normal way? “Yes, of course. Almost all auction lots can be viewed prior to the sale, and this is something we strongly advise. We very much see it as our responsibility to hold the hands of both buyers and vendors in the auction process. We always offer an advice service.
“Most people come along to an auction to bid on only one property. We can arrange what is called a proxy bid. This is an arrangement between the buyer and the auctioneer where the auctioneer is allowed to bid on the buyer’s behalf to a preset upper limit. This also allows people a level of discretion or anonymity. And we certainly never allow a property to be sold for less than it should. If we see there is a lot of interest in a property prior to the auction, we will adjust the guide price appropriately before the sale.”
Auctions are also an excellent way to market idiosyncratic properties like The White Tower (featured below).
Parsons Son & Basley are currently updating their auction website, which will be launched by early September. “We want to make sure we have things absolutely right before we show it to the public,” Richard says. “We have already re-thought and redesigned our auction catalogues, and we are confident that we have in place ways of showing to the public that property auctions are an exciting and viable way of realising the very best potential from their home.”
Parsons Son & Basley’s next auction date is 22 September at Hove Town Hall. For more information call 01273 274010 or visit www.psandb.co.uk
