Private Auctions Limited Due To Fear Of ‘Losing Face’
Malaysian Institute of Professional Estate Agents and Consultants (MIPEAC) believes sale of properties via private auction will not pick up, unless the fear of “losing face” is erased from the local culture.
“‘Losing face’ is a significant consideration in our Malaysian or Asian culture. Some years back, even putting up a signboard was something not permitted by owners,” said MIPEAC President Francis Loh as reported by The Star.
He was referring to owners who decide to sell their properties via private auctions instead of an agent due to a slow secondary market.
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Some owners are afraid that a “For Sale” sign would give an impression that they were under financial distress, hence, their property would not attract a fair price, said Loh.
Given the stigma attached to auctions, the number of private auctions in Malaysia have been limited.
In fact, Loh considers private auctions as a passing fad due to the actions of several very distressed and desperate owners.
Malaysian Institute of Estate Agents (MIEA) President Eric Lim noted that most of the properties sold by auctioneers are under foreclosure by bank.
Meanwhile, the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, Malaysia (PEPS) explained that selling a property via private auction could offer better exposure.
“In the heat of the moment, prices may be bid up. It does not mean that the property is being foreclosed,” said PEPS President Michael Kong.
He noted that a private auction is different from public auction which involves a foreclosure process and ends in the auction of the property.
Licensed auctioneer Leong Wye Hoong from Leong Auctioneer Sdn Bhd shared that the buyers at public auction may not view the property being sold, while they could do so in private auction.
With this, Kong urged buyers to do their homework for both types of auction.
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