Chapter Nine - Property Auction Sales

Summary

A tried and tested method of sale

Throughout the history of Peacocks, property auction sales have formed an important part of business activities, especially when market conditions have been appropriate for this well-tried method of sale. It can be claimed that a property sold by public auction has achieved the best price obtainable in the open market. While this statement may attract some criticism and debate, not least at times when the availability of short term bridging loans has been restricted, it has certainly proved effective in the past, as the Peacocks’ auction records reveal.

Public auction has long been accepted as the method of sale to adopt when a forced sale has to take place, as evidenced following the repossession and disposal of properties on behalf of mortgagees after borrowers have defaulted. Auction is also especially effective for: sale of properties of unusual type and character where accurate valuation is exceptionally difficult; where there are several keen prospective buyers; and in cases where the parties interested in the proceeds of the sale cannot agree.

Auction sales provide security for both the vendor and the purchaser as a legal contract is created on the fall of the hammer, thus avoiding the uncertainty associated with sale by private treaty, where there are often long delays prior to formal commitment. The vendor has the satisfaction of knowing the resulting price, and the purchaser knows he is certain of the purchase. There can be no gazumping, and any disappointed prospective buyer at least knows that a price has been paid above his own best bid.

There is little doubt that in the atmosphere of a crowded auction room, the competition of the bidding can result in a higher price being achieved than might have been secured by private treaty negotiation. The success of an auction relies on an inherent characteristic whereby the desire to have something is enhanced by the knowledge that someone else wants the same thing. Conversely, an auction is doomed to failure when there is only one potential purchaser present, or if there is no one prepared to bid at all.