Auction pros and cons

Auctions are taking place on a daily basis. They are growing in popularity as consumers are exposed to it through reality TV, effective marketing, press exposure of auctioneers, and consumer education, conducted by auctioneers and industry bodies such as the SA Institute of Auctioneers (Saia).

Fast, effective turnaround

An excellent example of this is within the property sector. When purchasing a house through an estate agent, the conclusion of the transaction can take several weeks – and often months. However, purchasing that same house via an auction sidesteps the timeconsuming to-and-fro negotiating of terms when dealing with a middleman. Buying a house at an auction means you bid, the offer is accepted and the house is yours when the hammer falls. For an urgent seller, the benefits of the fast sale are also apparent.

“The rapid turnaround of a transaction concluded through auction is hugely advantageous for seller and buyer,” says John Cowing, chairperson of Saia, adding
the process can often also be a more positive experience, compared with other methods of transacting. “Auctions are interactive, emotive environments that buzz with potential and are defined by human interaction.”

This time-tested method of buying and selling, which has been around since the 18th century, is also the ideal place to look for those rarer items that are harder
to find in shops or markets.

How auctions work

The auctioning of assets on an auction floor is still one of the most popular methods of buying and selling. Bidders or appointed representatives of interested buyers are assembled on the floor and actively bid in the auction by being physically present.

Increasingly, however, auctioneers are offering a broader variety of methods for bidders to participate in the bidding process that do not physically bind these potential buyers to the floor. Bidders can bid through a combination of online and live bidding.

You can buy an asset live at the auction from the comfort of your desk at the office or at home, through online bidding during a real-time, live-stream auction. An
online auction runs concurrently with a live auction and you bid online from wherever you are the moment the auction is underway.

This method benefits buyers and sellers alike, since buyers are not required to travel to a specified location to participate, while sellers are exposed to a larger potential buyer audience.

Bidding online offers consumers a convenient, measured and transparent method of buying and selling and offers secure payment.

Easy and accessible, but be informed

Newcomers to online auctions need not feel daunted by the procedure, since auctioneers provide training and educational videos to guide users through the process of online and real-time auctions.

Another auctioning option is an entirely web-based auction, where bids can be placed online for a specified period of time, often a week, after which time the
bidding process closes. Only then does the seller consider the offers placed during the period.

These methods ensure larger exposure of products for the benefit of buyers and sellers, but consumers should arm themselves with as much information as possible when considering participation in an auction, warns Cowing.

“Consumers have to do their homework,” he explains.

“Apart from viewing what they are interested in, they should find out where the asset comes from and why it is being sold. Ask the auctioneer questions. Don’t be intimidated.

Full disclosure on any item up for auction is a requirement in terms of the Consumer Act.”

Info:

> For more information visit auctioneering.co.za