Homes & Property

February 11, 2020

Housing glut: Expert advocates auction approach for sale of property in 2020

Dukiya restates commitment to tackling housing deficit in Nigeria

FILE: Low income housing estate in Abuja.

File Photo

By Chris Ochayi

Following the glut currently being experienced in housing industry, an estate surveyor and valuer , Mr. Lansar Aghaji, has said that auctioning would be the best option for sale of property in 2020.

Recall that the housing sector is yet to recover fully from the devastating impact of the recession, which the country slipped into between 2016 and 2018. Though Nigeria has exited the recession, many sectors of the economy are yet to experience a full recovery.

Aghaji, the Principal Partner of Lansar Aghaji & Co, a firm of estate surveyors and valuers, who expressed concerns over the high rate of vacant buildings across Nigerian cities, said drastic step must be taken to revive the sector and make it attractive to investors.

Aghaji said in a statement made available to Vanguard that auction was the easiest way of selling off the property because the process creates bidding rivalry among buyers.

According to him, “Like the traditional market where a commodity’s final selling price is based on the decisions of two parties (the seller’s marketing skills and the buyer’s bargaining prowess), transactions via an auction also confers the same authority on the potential buyers and sellers of a particular item. In an auction market, however, items usually have multiple prospective buyers who are in a simultaneous race to outbid each other..

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“The range of items that can be sold in an auction is almost limitless; arts, antiques, collectables (in all of their forms), confiscated property (by government agencies), liquidated assets, and real estate property to name a few. Contrary to popular opinion, auction sales are not always the last resort for sellers.

“Virtually all types of property are suitable for sale in an auction provided the reserve price is realistic and you are guided by an experienced real estate auctioneer. Nonetheless, it is still advisable to always consult an auction firm (who may also be licensed real estate valuer) to learn about the necessary process required to guarantee a worthy sale..”

Supporting his reasons owners should consider selling property through auction, Aghaji noted that, “It creates bidding rivalry among buyers: Unlike the other medium of sales where buyers attempt to bargain below the benchmark price, auction creates a bidding war among buyers of similar interests.

“This bid can quickly escalate when you have the right type of audience and an experienced auctioneer who knows how to invoke people’s interest in a commodity. The higher the intensity of the bid, the higher your chances of selling above your reserved price.

“It saves time and money. While a seller might be lucky to easily turn over a property by opting for other means of property disposal, auction sales have proven over time to be a faster medium of sales. Also, the highest bidder usually has a payment deadline which must be adhered to. By so doing, the seller would have significantly reduced the maintenance cost of holding on to a property for a longer period.

“It attracts genuine buyers: Interested individuals might start contacting you or your real estate manager immediately you inform the general public about your decision to sell your property. Even with the infusion of the best marketing tips, intermittent visits from prospective buyers of varying interest might be the only thing the property will be getting for a long while. By opting to sell via auction, your chances of disposing of the property significantly increase since the majority of the people who attend auctions are serious buyers.

“It is legally binding. It is not an uncommon practice for buyers to pull out or attempt to pull out of a property deal. By selling via an auction, the chances of having a failed deal significantly reduces. In an auction, the highest bidder automatically enters into a legal agreement which obliges the buyer to buy the property once he wins the bid”, Aghaji stated.

Vanguard News Nigeria.