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Monday Aug 06, 2012

Bank slammed over selling of property 'below asking price'

An Amanzimtoti financial adviser has lashed out at Standard Bank for being "incompetent" and "irresponsible" after it declined his online bid of R400 000 for a repossessed home in Jeffreys Bay as it was "below the asking price", but then sold it at a subsequent public auction for R40 000 less.

The reposessed unit in Jeffreys Bay - previously valued at R1.1 million and finally sold at an auction for R360 000.

The repossessed Jeffreys Bay unit, worth R1.1 million, that was sold for R360 000 at a public auction.

Standard Bank's response to Wilfred Hale - that he should have been at the auction if he wanted to resubmit his R400 000 bid - has been further slammed by Hale as having "bad financial" grounding.

Hale's excitement in April that his bid on www.myroof. for the R1.1-million unit was the highest, turned to disappointment and anger months later after his offer lost to one of R360 000.

In one of the many e-mail communications Hale sent to the bank - of which he said most were merely "ignored", he wrote: "I took the time to register on your site, send you all my credentials and pre-authorised my application only to find out the property had been sold for less than my offer".

Hale contacted the auctioneer, who confirmed the property was sold at a public auction on June 12 for R360 000.

Mark Gadd, director of Powells auctioneers, explained to The Mercury that his involvement began when the bank asked him to auction the unit, and he therefore had no knowledge of Hale's previous bid.

Gadd said, however, that Hale's case was not the first of its kind, and that another potential buyer had offered R1m for a property online, but it had been declined, and then the property had been sold at auction for R750 000.

He also told of a case in which a man who owed the bank R1.1m and was on the verge of having his home repossessed received an offer of almost R1m from a buyer at a public auction. But almost simultaneously, the sheriff attached this house, and despite the owner explaining he could sell it for almost the full amount owing, the sheriff auctioned it for less than R600 000.

"So this man now still owes the bank more than R500 000 when he could have paid almost the full amount."

Gadd said he sympathised with Hale and understood his frustration.

Standard Bank, however, defended itself in Hale's case, saying the two processes were "two separate, independent channels".

"Mr Hale used the online My Roof program and made two pre-auction online bids of R400 000 each on the same property in April 2012. Both bids were considered to be below the asking price at the time and neither were accepted," said spokesman Kershia Singh.

"As no other bid closer to the asking price was received... a decision was taken to move the property to a physical auction in June 2012 through an appointed auctioneer."

Singh said all properties that proceeded to physical auction were advertised.

"Any bid received via the online 'My Roof' channel is not a transferable bid to any other auction environment and the same would apply vice versa," he said.

Hale, who was given no notification that the property was going on auction, said the bank's decisions had no financial basis, and that people who were already in financial trouble were losing more money.

He e-mailed the bank on Friday, giving it four weeks for an adequate response, before taking it to the financial ombudsman.

"I am busy compiling a report for the ombudsman, and will be demanding financial compensation for the difference in the price I offered and the current value of the property, which amounts to about R700 000," he said.

The Mercury

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