You have to be it to win it, Auctions & Tenders!
Caillard & Kaddour (Vanuatu) Limited is committed to providing a professional service to motivated vendors, therefore has responded favourably to requests to be the first to hold Public Auctions & Tenders in Port Vila as well as Santo.
Many will be wondering, “What is an auction/tender”, others may have had some experience overseas where the auction or tender process is considered the most rewarding way to sell real estate by motivated vendors. You may hear “Auctions or for that matter Tenders won’t work”, which is a common cry usually from those that don’t understand, don’t believe or don’t have any desire to put in the effort or listen to the market. Whatever the case may be, it is our belief that irrespective of the type of property being marketed for sale or where it is located, the most important factor that will influence a successful outcome is the motivation of the seller.
These are the fundamental differences between an auction and a property offered by tender:
Auctions are carried out in public either on site or in rooms.
The process is conducted by a Auctioneer who is employed for a fixed fee, solely for that purpose by the vendor.
A buyer has the right to modify their offers during the process.
A tender, while not in public view is still a transparent process for those that are involved.
Buyers are invited to make a one time secret offer in writing. The offer should contain the following:
- the amount
- any conditions that the buyer may require
To focus those interested the agent advertises the listing with a cut off date & time.
The bids, which are normally delivered in a sealed envelope are opened by the vendors representative in front of all interested parties.
The vendor then chooses the one that most meets their needs or not.
In most cases the vendor will reserve the right to treat with the buyer that has presented what the vendor considers the best offer, privately.
So what are the benefits to a buyer at auction or tender?
The vendor is committed to selling within a certain time-frame and that it is not just “a property on show”.
The vendor has invested sizable amounts of cash in advertising and arranging to have all the paperwork ready for the unconditional sale on auction day.
The vendor may accept an offer prior to Auction day if it suits their needs.
On the day of the Auction the vendor is at his/her most negotiable, because it is a cash sale.
Should the property not sell “under the hammer” the bidder, who has had the highest bid recorded by the Auctioneer, earns the right to negotiate with the vendor immediately afterwards. So remember that you have to be “in it, to win it”.
If you are a potential bidder then you must carry out your research prior to auction day which includes:
Comparison of similar properties in the area that have actually sold in the past 6 months, taking note of the price achieved.
Look at properties that are currently on the market for sale and how long they have been advertised. As a rule, a property that has not sold within 90 days is either under publicised or over priced.
Should you not wish to be present on the day or remain incognito arrange to have a professional representative at the auction?
The buyer has tremendous power on auction day, it’s a cash unconditional sale, to save any embarrassment make sure you have the deposit to hand, a bankers cheque will suffice.
Know your limit, have your finances in place. The ANZ and BRED are both used to this sort of business and if finance is required will be happy to speak with you in the utmost confidence about arranging pre-approval.