Publications
Partners
- An auction is simply a public sale in which the property is sold to the highest bidder.
- The decision to purchase property, whenever on auction or otherwise, should never be taken lightly.
- Generally, property sold on auction is sold "as is", meaning along with its defects and issues, whether visible or not.
Buying property at an auction does not necessarily guarantee that you'll get a better deal - and the decision to buy property, whether by auction or otherwise, should never be taken lightly.
This is according to Skoko Sebola, principal at Leapfrog Midrand.
Sebola says the company has been receiving an increased number of enquiries about whether purchasing property at an auction is the way to "bag a bargain".
"The onus (duty) is on buyers to familiarise themselves with the process and ensure they do the necessary 'homework' before making a bid," Sebola explains.
Obtain a copy of the conditions of sale and carefully study it; inspect the property as closely as possible; find out if the property is currently being leased; enquire about levies and rates in the case of a sectional title unit, Sebola advises.
In terms of the auction, prospective buyers (bidders) need to register their interest in participating along with paying a refundable deposit. If your bid is successful, you need to pay 10% of the purchase price, while the balance must be guaranteed within 30 days. These details may differ from auction to auction.
"Other costs to take into consideration include the sheriff's commission in the case of a bank auction, as well as the auctioneer's fee," Sebola adds. "Also, the buyer is the one responsible for outstanding rates and levies."
Generally, property sold on auction is sold "as is" - the legal term is voetstoots. This means along with its defects and issues, whether visible or not.
"Unfortunately, this means buyers have little recourse in the event of something going wrong, or discovering a problem after the sale," says Sebola. "This is why it is crucial to do as many checks as possible and ask all the necessary questions."
And what about buyers on the hunt for a bargain?
A high percentage of first-time buyers have realised there is significant opportunity and value for money on offer at present, adds Dr Andrew Golding, chief executive of the Pam Golding Property group.
"From a residential property perspective, perceived value – which is also impacted by personal preferences - is probably best described as the most advantageous combination of cost, quality and sustainability," says Golding.
Sandra Gordon, Pam Golding Properties senior research analyst, says, in general, key aspects which buyers place value include location (quality of local schools, employment opportunities, proximity to shops and entertainment, and ease of access to highways and public transport); home size and usable space; age and condition of the home; upgrades and updates.
Tony Clarke, MD of the Rawson Property Group, believes now is an excellent time to buy, but it's not the time to "push the boundaries of affordability".
"Our economy is under extreme pressure and job security is low – it would be much smarter to use this time to buy low and pay off debt faster than to push your limits and risk losing it all if your finances take an unexpected knock," says Clarke.
