The ins and outs of property auctioneering

Malta Property Auctioneers specialises in the sale by auction of unique and distinguished properties offered on behalf of sellers who prefer a date-certain sale to a lengthy sale process filled with market uncertainties. Auctions are implemented with the highest degree of professionalism at the local, national and global level. Malta Property Auctioneers only offers properties which are in demand – paying close attention to luxury and unique properties.
Malta Property Auctioneers, founded on an extensive portfolio of experience in real estate, is the only property auction firm in Malta. The firm’s experience is not based on traditional brokerage methods alone. We have highly trained staff that is knowledgeable about the advantages the auction method brings about while having vast experience in real estate trends in Malta and access to modern marketing tools. Working towards their 36th property auction, Malta Property Auctioneers has set the tone for this specialized method of transferring property at a faster pace.

Malta Property Auctioneers does not conduct ‘distressed’ auctions only. The firm does, however, offer exceptional purchasing opportunities to qualified buyers. Every transaction is a fair, speedy and uncomplicated process. In fact, many of our clients favour auctions for acquiring assets for various reasons, some reasons being:

• The expeditious sale process auctions guarantee. The process often lasts less than 90 days from POS to contract.
• The clearly defined parameters for the date of sale, terms and conditions of sale, offered by Malta Property Auctioneers.
• Our elimination of contingencies and prolonged negotiations
• The access Malta Property Auctioneers provides to serious, qualified buyers on a local, national and global level.

Auction vendors cannot change their mind at the last minute if the reserve price is met.
There are several other benefits to using the auction process. We realize that some people may have their doubts about the procedures and general terminology about the auction, so we have tried to answer some of the most frequently asked questions here.

Why is the property up for auction?

Sellers are motivated to sell by auction for many plausible reasons. The number one reason a seller chooses to offer their property at auction is that it promises a quick sale. There are times when people relocate or purchase a larger or smaller property and do not want to have to pay two bank loans while waiting for the real estate agent to produce an offer. Many times, the property is an inheritance and the heirs just want to cash out and go their separate ways. There are also times when the true value of the property is difficult to evaluate even by the most experienced of agents and the only way to really find out what the property is worth, is to put it up for auction and let the buyers express what they are willing to pay.

What can potential bidders learn about auction properties before bidding?
All properties that go under the hammer are advertised regularly through various mediums, including local newspapers, magazines and online websites. One can also register online to receive regular updates as well as auction catalogues 30 days prior to each auction. These allow people to determine in advance which properties they wish to view and to get an idea of the maximum price they may be willing to pay. Naturally, if there is a property that interests you, you may call the company and make an appointment for a viewing. Sometimes, open houses are held so potential bidders can walk through the properties well ahead of bidding. Typically, pre-auction offers are accepted, meaning that the sale could actually go ahead before auction day provided that the offer is accepted by the vendor. The auctioneer usually conducts preliminary searches on the property and will have information packs available on request. A blank promise of sale, with the details of the property itself, is also included. If one wishes to make a property survey or have an architect inspect a property prior to the auction, this is permitted at an additional cost.

Is there a ‘reserve’?
Yes, almost all the properties on auction have a set reserve price. A reserve price is a price below which the lot may not be sold. The auctioneer has the right to sell the property at the reserve price or above. The reserve price is established between the auctioneers and the vendor and it is kept confidential.

The property I was bidding for didn’t reach its reserve price. What will happen to it now?
If the property doesn’t reach the reserve price, it will not be sold under the hammer. However, if you are interested in the property, we advise you to speak to the auctioneer following the auction and submit your best offer. We try to make sure our vendors are contactable on the night of the auction and, if you come to a compromise on the price, it will be possible to sign a promise of sale.

I have a property to sell, what expenses am I responsible for?
Like with all property sales in Malta, the only expense you are responsible for – besides property tax – is a pre-set commission on the sale of the property. If the property is not sold, then no commission is due. The auctioneer carries the expense of all the marketing and advertising, as well as the notarial fees for drawing up the pre-required paperwork.

What factors determine the success of an auction?
1. The desirability of the property being sold. This includes elements such as location, property type, state of condition, surrounding properties and available outdoor space.
2. An attractive guide price which will attract potential purchasers to view the property.
3. Realistic expectations on the part of the seller.
4. Selecting an experienced auctioneer with vast experience in the local market.
5. Conducting the auction in a professional manner and following up until the closing stage.
6. An assertive marketing and advertising plan geared to prospective purchasers.