Property sale by auction

Malta Property Auctioneers Ltd will be holding its seventh quarterly auction at The Pavillion, Westin Dragonara Resort, on October 11. The company's last auction raked in over €2.6 million in property sales. Managing director Pierre Faurè believes that if the right property is offered at the right price and in the right location, there are still plenty of purchasers and investors seeking good property.

Although the concept of selling by auction is still a relatively new idea to Malta, more and more people are learning about the process and realising its benefits.

"Selling through auction is a transparent process and although it could be scrutinised by many, it will always be an accurate indicator of property market value at any given time. At the end of the day, the value of a property is the maximum price one is willing to pay for it."

Mr Faurè said: "We have had several properties that have sold way over what we thought they would sell for, the main reason for this being that either a certain amount of competition was created between two or three potential purchasers or because the buyers fell in love with the property and were willing to pay more."

How do property auctions work? Every quarter, a portfolio of lots are put together. Not all properties are suitable for sale by auction. "We try to look for properties that are unique and in demand and moreover, lots which we can offer at an attractive guide price," said Mr Faurè. The lots are marketed in various ways - through local newspapers, foreign and local magazines, television and other forms of media. Any potential purchaser is invited to call to make an appointment to view any property that might be of interest.

The lots are auctioned in a salesroom on the same day. Prospective buyers assemble and register for a bidding number. To do this all one requires is an identity card and proof that he/she is in possession of 10 per cent of the guide price of the lot/s he wishes to bid on. One should have an idea of the maximum bid they are prepared to offer. They may be restricted by the amount that they can finance on mortgage. Remember, it's very important that one doesn't get carried away - you must not exceed your ceiling price.

If your bid is successful, at the drop of the auctioneer's hammer, you will be legally committed to purchasing the property. At this stage, you will be expected to pay the auctioneer the 10 per cent deposit. Similarly, the vendor is legally bound to sell the property. A notary will be present to sign the promise of sale.

The appropriate property searches would have been carried out well in advance, so a speedy completion is always possible. Anyone interested in one of the lots is encouraged to view the legal documentation and searches before the bidding process. Also, most of the preliminary agreements are unconditional and the option to purchase subject to financing is not offered.

From here, the completion of the transaction will run along exactly the same lines and procedures that a normal purchase would take.

Properties are usually sold at auction for one of these reasons: the property has been or is about to be re-possessed and a quick sale is required; the market value of the property is difficult to establish; the property is an inheritance and part owned by a number of individuals; the property may have development potential; or it has been on the market for some time and may be proving difficult to sell.

Malta Property Auctioneers Ltd welcomes all third parties. The lots are listed exclusively, however if you are an agent or broker and think you have clients suitable for a lot being offered, just set up an appointment.

Malta Property Auctioneers is currently listing properties for its auction. More information can be viewed on the website www.maltapropertyauctioneers.com.