FAQ

PROPERTY AUCTIONS 101:

AGENTS/SELLERS/BUYERS

How do I know if an auction is right for me or my client?

Auctions are ideal for selling properties, especially one-of-a-kind, incomparable properties. Every market has a threshold above which properties are more difficult to monetize, and the typical tools of price reductions and prolonged advertising and PR exposure can hurt more than help the outcome of sale. Especially when it comes to R5 million, R10 million and R20-plus million properties, price often has no bearing on interest level, and price reductions are ineffective. This said, creating an auctioneering platform can benefit all property sales in every price class, especially when the Seller is urgently looking for maximum exposure.

How does an auction benefit me?

Most of the world’s finest assets are sold through auction — art, jewellery, classic cars, etc. Why not properties? With R1 billion in sales of properties, we’ve answered the “why.” The process works. iSoldOnline are a win-win-win solution.

Our buyers gain first access to our curated selection of the finest properties available from across the globe. They name the price via a straightforward and transparent bidding process, with a smooth, simple transaction.

Our sellers name the timing and terms of the sale with a transaction generated within a maximum of 90 days, as well as gaining global exposure with targeted marketing, PR and sales campaign, and access to an industry-leading database.

Our agent partners benefit from the activation of qualified bidders, access to award-winning marketing, and sales support with protected commissions.

Are auctions only for distressed properties or for all properties?

iSoldOnline optimizes value for all the properties, hands down (or should we say paddles up?). Our typical seller is well capitalized and not in a distressed situation. Rather, our Sellers choose the auction route to accomplish their goals within their ideal time-frame.

Why should I choose to auction instead of sell traditionally?

The question is not whether to auction instead of selling traditionally, as we see ourselves as an added tool rather than an alternative, and partner with a listing agent on every sale. However, we do know from experience that the traditional agent model has limitations. In the rarefied air where the buyer pool is limited, properties simply aren’t very liquid, even in healthy market conditions.

The  iSoldOnline Process 

Are agents protected?

Yes. We have never conducted an auction without a listing agent involved and a commission offered to a buyer’s agent. The results are simply better through our collaboration with real estate professionals.  

What are the different auction formats you use?

  1. Without Reserve — The property will sell to the highest bidder on auction day. There is no minimum bid that must be exceeded to purchase the property.
  2. Reserve — The property will sell at or above a pre-determined price threshold on auction day.
What is the difference between a Public Auction and a Silent Auction / Tender ?
There is a distinctive difference but the main defining difference is during the Auction or Tender process.
1. A Public Auction  displays the bidding price and Rand Value.
2. A Silent Auction / Tender displays the amount of bids on the actual property.

This is a crucially important distinction. In a Public Auction a property may become polluted when low bids are displayed.

In a Silent Auction no other prospective buyer knows what the bidding prices are, so fear of possible loss potentially inspires higher bidding prices.

How does the auction process work?

Typically, our properties are marketed anything up to four weeks prior to the auction date. We deploy a dedicated, project sales manager to work alongside the listing agent, educate potential bidders about the auction, and facilitate registrations. The properties are typically available during this timeframe for potential bidders to attend the preview and conduct inspections. Diligence is encouraged, as all sales are “as-is”, without contingencies. 
 
 

What are the costs?

Our sellers do not pay commission or an up-front Engagement Fee, or a Flat Fee but are responsible for a .5%  Advertising and Marketing fee.  ( R1 Million Property Advertising and Marketing Fee equates to R 5000 ) This only becomes payable upon registration.
The Buyer pays a premium on the highest bid amount and any applicable transfer fees. We pay cooperating broker commissions for bringing a winning bidder. Depending on the particulars, we may recommend an opening bid incentive that encourages buyers to submit an opening bid in advance of the auction.

Do you accept pre-auction offers?

It is not uncommon to receive pre-auction offers, and all offers are presented for consideration.

What is a Buy Now price?

The Buy Now price is a price that the seller has agreed to sell the property for, without contingency, prior to auction. The Buy Now price is exclusive of all fees, excluding the Buyer Premium. This premium remains payable by the Buyer.

Where does the auction take place?

  • Typically Bidders are able to participate on site, online, via proxy or by phone.
  • Portfolio Sale — The property will be auctioned “live”, alongside other properties, in a similar execution to that of an auction.
  • Online Marketplace — Our online marketplace (iSoldOnline.co.za ) allows buyers to participate in our auctions digitally real-time from anywhere in the world. Bidders are able to watch bids live, and/or in conjunction with a phone or proxy representative when they are logged in. Bidding may take place solely on the website, or in conjunction with an or Portfolio Sale. Visit the property’s page online for details and to sign up for an account or log in.

ARE YOU READY

I am ready to sell my property at auction. What now?

Our seller vetting process is something we take very seriously. We typically accept one in every 20 properties that come our way, so our buyers know they are bidding on one of the best opportunities available from across the country. But first, let’s start with a conversation. Send a SMS or e-mail to the Preferred iSoldOnline Agent in your area (find them on social media and watch out for boards in your neighbourhood) or send an e-mail to: support@iSoldOnline.co.za to connect with one of our sales managers to move forward in the process.

Are You ready to register to bid. What now?

You may register to bid directly on the property page by clicking the “Register to Bid” button. Or, SMS +27 83 297 2963 us at for personal service. Our registration process has three steps: 

  1. Complete and submit the Terms & Conditions of Sale.
  2. EFT  your Bidder Deposit, typically R10,000 , which is credited towards your purchase if you are the winning bidder, or is returned the following business day if you are not.
  3. Provide a letter of reference from your bank or financial institution (sample included with the Terms & Conditions).
Typically, our properties are marketed anything up to four weeks prior to the auction date. We deploy a dedicated, project sales manager to work alongside the listing agent, educate potential bidders about the auction, and facilitate registrations. The properties are typically available during this timeframe for potential bidders to attend the preview and conduct inspections. Diligence is encouraged, as all sales are “as-is”, without contingencies. The Terms and Conditions of Sale, Purchase Contract, and available property documents can be downloaded from each property page.
 
 

What are the costs?

Our sellers do not pay commission or an up-front Engagement Fee, but are responsible for a .5%  Advertising and Marketing fee.  ( R1 Million Property Advertising and Marketing Fee equates to R 5000 )
The Buyer pays a premium on the highest bid amount and any applicable transfer fees. We pay cooperating broker commissions for bringing a winning bidder. Depending on the particulars, we may recommend an opening bid incentive that encourages buyers to submit an opening bid in advance of the auction.

Do you accept pre-auction offers?

It is not uncommon to receive pre-auction offers, and all offers are presented for consideration.

What is a Buy Now price?

The Buy Now price is a price that the seller has agreed to sell the property for, without contingency, prior to auction. The Buy Now price is inclusive of all commissions and fees, including the Buyer Premium.

Where does the auction take place?

  • Typically Bidders are able to participate on site, online, via proxy or by phone.
  • Portfolio Sale — The property will be auctioned “live”, alongside other properties, in a similar execution to that of an auction.
  • Online Marketplace — Our online marketplace (iSoldonline.co.za ) allows buyers to participate in our auctions digitally real-time from anywhere in the world. Bidders are able to watch bids live, and/or in conjunction with a phone or proxy representative when they are logged in. Bidding may take place solely on the website, or in conjunction with an or Portfolio Sale. Visit the property’s page online for details and to sign up for an account or log in.

ARE YOU READY

I am ready to sell my property at auction. What now?

Our seller vetting process is something we take very seriously. We typically accept one in every 20 properties that come our way, so our buyers know they are bidding on one of the best opportunities available from across the country. But first, let’s start with a conversation. Send  a SMS to +1 787 222 9753 or send an e-mail to: support@iSoldonline.co.za  connect with one of our sales managers to move forward in the process.

Are You ready to register to bid. What now?

You may register to bid directly on the property page by clicking the “Register to Bid” button. Or, SMS +1 778 222 us at for personal service. Our registration process has three steps: 

  1. Complete and submit the Terms & Conditions of Sale.
  2. EFT  your Bidder Deposit, typically R10,000 , which is credited towards your purchase if you are the winning bidder, or is returned the following business day if you are not.
  3. Provide a letter of reference from your bank or financial institution (sample included with the Terms & Conditions).

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iSoldOnline Silent Auction

Does it deliver sellers the best possible results?

As a seller determined to achieve the highest possible price in the current market, the one thing that you should never do is let your interested buyers know what other offers you have received. When buyers competing offers are disclosed to one another at an auction, they do not focus on putting their best foot forward by offering the highest price they are respectively willing, able and prepared to pay.

The buyers focus on beating the competition and winning the auction rather than paying their maximum price. With iSoldOnline submitted bids are confidential, thereby enticing seriousloy interested Buyers to bid higher rather than lower.

Do you want to know the highest price every buyer is prepared to pay for your property?

When you assemble all your interested buyers at one venue and shout at them with a pointed hammer (as happens at a public auction), you invariably end up with a series of $500 or $1,000 bids to close out the sale.

But what happens if the final bidder was prepared to pay $50,000 more than the second highest bidder? In that case, as often happens at public auctions, the seller loses $49,000 they could have had, if they hadn’t sold through a public auction.

Virtually every seller sell their properties for less than the buyer was prepared to pay for it. It amounts to silent pain for the seller and silent gain for the buyer. iSoldOnline never allows this to happen. Only the Seller and the Preferred Agent know what the submitted bids were.

Competition

Negotiation experts (and card players) all agree that you should never let the other side know what your position is. During a hand of poker, have you ever seen a card player turn their cards up for everyone at the table to witness and ask the competitors for advice? As a property seller, why let the buyers see your cards? Agents often talk homeowners into public auction as the best way to ‘create competition’. What is often overlooked is that buyers are competing for the property and are not bothered by the process used to sell the property. Interested buyers will compete for the home, regardless of which sale process is used.

Bidding at a public auction is not competitive – it is comparative. . If a bid of $1,000,000 is made at an auction, the next bid will likely be R1,005,000, or R1,010,000. It won’t be $1,200,000 or $1,300,000.  Each buyer attentively listens to each competitor’s bid so that they can bid at comparative levels and not competitive levels.

Many buyers who are the under bidder at an auction make an off hand comment that they stopped bidding because the other party was just going to keep going.

This regularly happens at public auctions but would never happen using the iSoldOnline Silent Auction Tool.

Campaign

Public auction campaigns focus mainly on maximising the number of interested buyers and setting a deadline for those buyers to act, regardless of the sale process chosen by the seller. Some agents say that by having a public deadline, it pressures buyers into action. That may be true in some cases, but it also puts pressure on sellers to ‘meet the market’. If not, they risk passing their property in at auction and having the final bid recorded in the Sunday paper as the AUHB (Auction Highest Bid). Now all the buyers and all the agents know what the highest bid was. This is disastrous in terms of the property value proposition and definitely won’t help the seller to achieve the highest possible price, even at a later stage.

That definitely won’t help the seller achieve top dollar later. Having a publicly known deadline creates just as much pressure for the seller as it does for the buyer. This scenario is orchestrated by agents to ensure that a sale is made. At a public auction, getting a sale on the day in front of the crowd is usually the aucioneers main priority.

Silence is golden

In Scotland, when agents are ready to close out a real estate transaction, all the interested buyers submit their best, highest and final offer in a sealed envelope for the seller’s consideration. Some call this a ‘silent auction’. In most, if not all cases, the owner sells the property to the party with the highest offer. Scottish people do enjoy a quid. The Scottish know that if you let a $1 million dollar buyer know that the next best offer you have received is only R900,000, you will only be offered R901,000 from the buyer that was prepared to pay R1 million. How could the seller justify asking for that extra R90,000?

One real estate firm which regularly conducts silent auctions in Australia explains how the sale of a prestige family home in Balmain, New South Wales, achieved the highest possible price using a silent auction. Not only did it achieve the highest possible price, it achieved a price that would have been mathematically impossible using a public auction where bidding is open.

‘The property generated enormous interest in a short period of time. Given there was sufficient interest in the home, a deadline was set to ensure closure whilst the interest was high.

The homeowner set their private reserve price at $2 million.

‘All four interested buyers submitted their best, highest and final offer on or prior to the nominated deadline. Each offer was submitted on a binding contract with deposit cheque. The offers came in at R1,950,000, R2,050,000, R2,150,000 and R2,210,000 respectively.

The contracts were exchanged for R2,210,000 providing the owners with a R55,000 windfall that a public auction would have failed to achieve.

A public auction would have sold the home for R2,155,000, which would have been an outstanding result for the owners. Although R2,155,000 would have delighted the seller, by conducting a silent auction, they achieved the highest price the highest bidder was prepared to pay.

If the property did sell at public auction, many people would have understandably left the auction mightily impressed. The newspapers would have reported how the property sold for a whopping R155,000 above the reserve price. The R55,000 left in the buyer’s pocket would be a silent victory for them when it would have appeared to everyone that the owners had a public victory.

Most of the positive marketing components in play at a public auction work equally well for a silent auction. It is the process of closure on the sale where a ISoldOnline wins hands down and protecting the seller with his reserve price at all times. This is a win,win,win

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