Property Auction South Africa
Auctions are an attractive means of selling and buying these days, which we have discussed in a previous article. But the process is quite different to a normal sale and so we advise that buyers fully investigate when looking for a property in auction. Have a look below at what happens before, on, and after an auction. Remember, much of this will also apply to a movable auction, too.
Investigate the Property
As properties on auction are sold voetstoots, it is vital that you visit and inspect the property yourself before putting in a bid at an auction. If you can’t see it yourself due to the location of the property, we advise that you have someone you trust to visit it for you and verify if it is worth bidding on.
Before putting in a bid for a property in auction, get as much information and history as you can. You can often obtain a lot of the info you need, such as title deeds, plans, lease agreements etc. from the auctioneer. Always inquire about this kind of information beforehand.
Conditions of Sale
Read the conditions of sale thoroughly. If you do this, there should be no unexpected and unpleasant surprises after you’ve bought the property.
Be sure to have your financing options ready for the day of the auction, whether you are taking a bond or are paying cash.
On the Day
Arrive early to the auction and register as a bidder. To do this, you will need some personal documents for Fica, such as your ID and proof of residence. There is also usually a fee you’ll need to pay to register. Find out from the auctioneer how and when this needs to be paid.
Amendments to Condition of Sale
Double check the conditions of sale on the day to ensure that you are aware of any amendments made to it.
Order of Sale
You’ll also need to get an order of sale so that you are aware of the lot number of the auction.
If you successfully bid for a property in auction, there are certain actions you’ll need to take immediately before leaving the auction, such as paying the auctioneer’s fee and the stipulated deposit amount. Also check when risk of the property legally passes to you – is it on the fall of the hammer or on registration? This will affect the time when you will need to take out insurance on the property.
Remember that, because the property is sold voetstoots and because an auction is public, you cannot rescind from the deal if you regret your decision after the auction. Similarly, there can be no questions regarding any unsatisfactory defects or faults in the property – all of these are now your responsibility.
Should you default on any part of the deal, the seller has the right to legally enforce that you uphold and fulfil the terms of the contract.
Image credit: DDM Residential