Property owners rely on auctions instead if agents

Ng Chan Mau from Ng Chan Mau & Co Sdn Bhd


According to the property market, the property owners are auctioning their properties instead of relying on agents. The owners turned to private auctions because they were unable to sell out their properties for years via real estate.

For private auctions are being held for sell residential, commercial properties and land, said by Ng Chan Mau & Co Sdn Bhd, they are one of the famous auction houses in country.

The business development manager Tom Low Chee Hian said that private and owner-appointed auctions nowadays is seemed to increasing and growing. He started with his company by organizing private auctions 8 months ago and the volume of properties has sold 40%.

Besides that, other auction houses also involved which include Ehsan Auctioneers Sdn Bhd and Property Auction House. They are both declined comment.

One of the licensed auctioneer Leong Wye Hoong from Leong Auctioneer Sdn Bhd, he said private auctions is quite a common practice. It started 4 years ago, and has organized between 50 and 60 of them, with a success rate of 20% to 25%. ‘’ If the owners don’t want to reduce the price, there is no point to sell a property via private auction”, said by Leong.

Besides that, he also said auctioning properties is an element of hoping the unit price will be bidded upwards. In fact, that also may be to accept the price reduced. He said, secondary market has been slower down from the last few years with the demand more towards residential units although he is organized private auctions for commercial retail.

A bank- related auction resulting from a foreclosure, potential bidders can view the property before the auction take place. If the property is still under financing, and the owned sum to the bank is higher than the price, normally the owner will not sell out the property.

Deposit of 2% to 10% is required when the auction and instead of the normal 10% is being foreclosed by bank when bidding. The deposit is used in the auction when the successful bidder is unable to deliver the balance of the purchase price within 90 days.

The slow market has resulted in real estate agencies accepting project sales contracts with developers, where they help developers to market their projects instead of concentrating on servicing the secondary market.

Source: Thestar