Real estate auctions falter 4 key factors holding up deals

Poll: Abdullah Al-Salih: Real estate auctions are affected by many factors that play a role in evaluating their results and their ability to achieve their sales goals, such as the timing of their holding, the strength of marketing and promotional campaigns for the properties offered, and the professional and fair evaluation of them.

Real estate auctions are affected by many factors that play a role in evaluating their results and their ability to achieve their sales goals.

Amlak real estate newspaper reviews in this survey the most prominent challenges facing auctions and the secrets of achieving successful deals.

Khaled Al Moubayed: Auction success depends on the type of opportunity

Mr. Khaled Shaker Al-Mubaid, interested in real estate affairs, stressed that the success of a real estate auction depends at least 70% on the type of opportunity offered and the amount of demand for it, while the other 30% constitutes the fairness of the evaluation, which must be based on international principles and standards that often value the property at less than its market value.

Mr. Khaled Shaker Al-Mubaid, interested in real estate affairs, stressed that the success of a real estate auction depends on no less than 70%. He explained that the failure of some auctions is often due to the psychological impact on investors as a result of the decisions and regulations issued, which makes them wait in anticipation of an upcoming drop in prices, and stressed that this behavior is natural and neither the auction organizers nor investors are to blame, as it is natural for investors to hold on to their liquidity until the market is clear and the fog dissipates.

Mubarak stressed that the auction organizers and investors are not to blame for this, as it is natural for investors to hold on to their liquidity until the features of the market are clear and the fog dissipates. He stressed that it is illogical to hold a specific party responsible for the failure of real estate auctions, as auctions in essence depend entirely on the decisions of investors who are looking for opportunities at below-market prices to achieve investment gains or own real estate at an appropriate value, and added that waiting to inject liquidity despite the availability of opportunities is an effective but temporary behavior that will end when the fog is gone and the future vision is stable.

Tariq Al-Bawardi: Personal relationships and customer trust are the biggest drivers of purchase

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Mr. Tariq bin Ibrahim Al Bawardi, Tatima Real Estate - Auction Management, said that success in auctions depends on a set of integrated factors including timing, appropriate price, marketing efficiency, and scarcity of supply in the region, noting that the absence of any of these elements may lead to a faltering sale.

Al-Bawardi emphasized the great impact of timing, explaining that auctions witness a decline in demand during Ramadan and the summer period, while activity increases significantly in the winter and spring. He pointed out that the months of Shaaban, Shawwal, and Dhi Al-Qa'da usually witness a peak in sales and implementation, with the exception of the current year, which is witnessing a state of anticipation in the market, and regarding the most suitable days to hold auctions, he believes that Tuesday and Wednesday are the most attractive to attend and bid.

Bawardi

Personal communication is the biggest factor in the success of auctions

Regarding the influencing factors, Al-Bawardi stressed that personal communication is the biggest factor in the success of auctions, and the customer's confidence in the broker or the organizing body plays a greater role in pushing the customer to buy, in addition to the type of property and its strategic location, pointing out that proposing the optimal investment with an investment or development concept for the property can increase demand and raise the price, especially if the offer is presented in an attractive and correct way from both organizational and legal perspectives.

When it comes to attracting the right investors, Al-Bawardi said that Tuesday and Wednesday are the most attractive days for attendance and bidding. As for attracting influencers, Al-Bawardi explained that their impact on the sales process is relative, and mostly reflects the marketing company's effort in its marketing campaign, which brings it other opportunities to carry out auctions, and explained that this is more about marketing the company than its direct impact on the sale, although it has a relative impact.

Al-Bawardi advised that influencers are more important in the marketing of the company than its direct impact on the sale, although it has a relative impact.

Al-Bawardi advised owners to resort to auctions in specific cases such as the urgent need for liquidity or the need to sell the property in a specific period of time, stressing the need to offer the property at an encouraging price in these cases to achieve the time goal, and to achieve a satisfactory profit, and emphasized that auction goers tend to buy when the property represents a real opportunity, not just the normal market price, especially with the scarcity of supply in the vicinity of the property.

In the end of his statement, Al-Bawardi expressed his appreciation for the company's marketing campaign, which brings opportunities to carry out auctions. <In the conclusion of his statement, Al-Bawardi expressed his opinion that the valuation of some properties is very exaggerated, and the owner of the property may interfere with the opinion of the appraiser to increase its price, and emphasized the great role of appraisers in influencing pricing and thus the success of the auction, Al-Bawardi suggested investors to clearly define the opening price target, suggesting dividing electronic auctions into two types: Announced (the opening price is the selling price), and unannounced (the opening price does not reflect the selling price), due to its impact on the extent of investor interaction.

Bander Al-Hamoud: Market condition is the most important factor in selling real estate

<Mr. Bandar Abdullah Al-Hamoud, CEO of Bandar Al-Hamoud Group for Development, Marketing and Auctions, believed that the state of the market is one of the most important and prominent reasons affecting the success or failure of the auction; in the case of turnout and liquidity availability, this will work on the success of the auction, as well as the type of property and its safety from issues in the offer, whether in specifications or documents Al-Hamoud explained that after that come secondary reasons such as the presence of distinctive specifications of the offer, or weakness in the marketing mechanism and issues in communication to the targets of the auction, in addition to poor relations with those interested in this offer, and Al-Hamoud pointed out that the high or exaggerated valuation price of the property leads to the failure of the auction and the failure to sell it.

Khaled Al-Humaidi: Timing and marketing plans. The secret to successful auctions

The real estate market in general is linked to each other, and also linked to other markets, but real estate auctions are subject to evaluation and studies specific to selling at auction, so it may be less affected by other markets somewhat; due to the nature of selling at auction and the nature of participation and competition between participants and those interested in the opportunity offered at auction, and the success or failure of real estate auctions is relative and variable and related to many factors and reasons, this is very natural and not new in the world of real estate auctions.

Real estate auctions. Factors affecting the success of real estate auctions:

• Marketing and advertising plans and methods.
• Budgets allocated to implement marketing plans.
• Duration of the advertising and marketing period for the auction.
• Reaching the target audience and determining the required scope.
• Time, date and location of the auction.
• Support team skills for the participants and those interested in the auction.
• Studying the offered properties from all aspects, their advantages, disadvantages, development opportunities, investment opportunities, their market value and its relation to the valuation for the purpose of auctioning, as well as providing suggestions or best uses for the offered properties.
There are many other factors and reasons, including those associated with in-person auctions only, electronic auctions only, or combined auctions between the two types, as the efficiency and strength of these reasons increases the likelihood of a successful auction, and vice versa, their weakness or weakness of one of them may cause the auction to be unsuccessful.

<On the other hand, there is a great impact on the timing of the auction, so determining an appropriate time to hold the auction is very important, so care must be taken not to conflict with any official event of interest to the community in general or with national or sports events or religious seasons such as: The holy month of Ramadan and the Hajj season, as well as the dates of official vacations, all of which have an impact on the results of the auction either in the success rate or the level of the number of participants or the resonance of the auction, so the timing of the auction is very important.

Pricing or valuation of real estate

<The mechanism of pricing or valuation of the property plays a big role on the general behavior of participants and competitors for the properties offered at the auction, as the nature of the valuation of the property for the purpose of selling it in a public auction is an opportunity for those wishing to seize it and potentially increase the number of competitors for it, "In short: The world of auctions is a fun and exciting world and the opportunities are sometimes once in a lifetime."

No auction is without controversy.

There is no auction without real estate marketing tools for the purpose of reaching the largest possible number of interested parties and expanding the reach of the auction, but one auction differs from another auction in the way of using these tools and optimizing them and filling gaps and gaps to obtain high marketing value, efforts differ, and we also do not forget that the use of technology and modern means of social media platforms and real estate platforms to expand the reach of the auction and its marketing details.

Coordination between auction organizers

It is important to coordinate not to overlap the marketing and advertising periods for close auctions; especially if they include the same type of real estate use and specifically in the same area, if this happens it may have an impact on both parties or one of them, and it is better to spread the dates of the auction periods to increase the excitement and thirst for participation and competition for opportunities, so we often advise auction organizers to coordinate among themselves to agree on schedules to hold auctions, especially in person, in order to serve all sellers, buyers and organizers as well.

Often our advice to auction organizers is to coordinate among them to agree on schedules for holding auctions, especially in-person auctions to serve all sellers, buyers and organizers as well. One of the most prominent practices and policies that I believe contribute to enhancing the success of the real estate auction is choosing a suitable location for the "in-person" auction that is easily accessible to most participants, as well as choosing a suitable digital platform to hold the electronic auction so that it is easy to use and characterized by the clarity of the bids in it, the strength of technical support and ease of communication with them, and it is preferable to combine between in-person and electronic auctions in real estate auctions with providing all services and technical means in the site and choosing a distinguished and creative presenter and embarrassment in his ability to link between in-person and electronic bids in the auction hall.

Auctioneers and auctioneers

The embarrassment of real estate auctions

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Turki Ahmed Al-Osaimi: Auction properties. Why are opportunities faltering?

<When a property doesn't sell at auction, it's often not because the reasons aren't clear or the landscape is complicated, it's really about three main themes: The type of property and its attractiveness, the price offered, and the quality of marketing. When this trilogy is complete, the auction has a chance of success, and when it is dysfunctional, failure is to be expected.

Not all land is up for grabs. <Not all land is in demand, not all prices are attractive, and not all marketing campaigns reach their target audience. Take for example an agricultural land that was professionally marketed but did not sell; maybe the issue is the price, maybe the property itself is not attractive to customers. Sometimes the property is good and the price is attractive, but attendance is poor because the marketing didn't communicate the opportunity to those interested.

<Selling at auctions does not happen in a vacuum, there are always external influences that reshape the market appetite such as: Changes in legislation, such as decisions on white land fees, all play a role in creating a state of anticipation that affects buyers» behavior. What was fiercely bid on yesterday, may be offered today at a lower price without the same enthusiasm.

Timing Matters

At the center of it all is an important and often overlooked element: Timing. Auctions are not time-neutral. Summer, for example, is an inherently active season, while the months of Ramadan or the end of the calendar year are notoriously sluggish. In some cases, buying interest can drop by as much as 40% just because the auction was held at the wrong time.

Comparing online and in-person auctions, the difference is also vast. In the former, announcing the opening price encourages competition and increases the odds of an award. In in-person auctions, the absence of a published opening price has a negative impact on buyer interest, especially for those with no prior auction experience.

The more frequent the auction, the more likely it is to be successful. <With so many auctions, the scramble itself has become a challenge. Approximately 98% of real estate auctions are overseen by the Enforcement Attribution and Liquidation Center, with an average of up to 50 auctions per week. This momentum, with an execution cycle of only 21 working days, creates confusion for some bidders, making it difficult for them to carefully track and analyze opportunities.

Cultural gap in understanding the auction mechanism

There is also a cultural gap in understanding the auction mechanism, clearly visible in less densely populated provinces and regions. Some believe that winning an auction is determined solely by the highest price, without considering that the property has been appraised by certified appraisers, creating a misunderstanding that keeps a large segment from participating.

The most prominent challenge is that the auction process is a cultural one. <But the biggest challenge is limited access to financing. Today, the vast majority of auction participants are "liquidity owners," while buyers who rely on bank financing remain ineffective. The reason: bank requirements, short repayment periods - sometimes as short as three days - and the absence of dedicated financing models for this type of transaction.

Rethinking the financing environment

If we want real estate auctions to become a real tool for expanding homeownership, we need to rethink the financing environment associated with them. There are simple but effective steps: Providing the buyer with a document that demonstrates their ability to finance before entering the auction, providing a flexible and fast financing mechanism that responds to the specificity of auctions, prioritizing these deals among banks and finance companies, and streamlining procedures as much as possible.

What we need is more. <What we need is nothing more than careful guidance and some flexibility in the system. Real estate auctions are not only a means of disposing of assets, they can be a strategic window to empower individuals, move the market, and ensure fairness in real estate distribution. What is important is that they are properly managed and reset in line with market shifts and the ambitions of participants.

Executive Director of Tatma Real Estate