How does a property auction work?

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How can I take part in the bidding process at an auction?
You have to register before the auction by means of paying a security deposit (refundable if you are not the highest bidder) and also provide a copy of your ID as well as proof of residence.

The auctioneer will ask you to complete a bidder’s registration card and you must also complete the bidder’s registration at the registration desk.

Can I take part in the bidding process without registering for the auction?
The auctioneer is not allowed to take bids from anybody has hasn’t followed and complied with the registration process.
Why do I have to pay a registration fee?

A security deposit is required to protect the auction and bidding process as well as the potential bidders to ensure that everyone attending an auction complies with the terms and conditions of the auction and not simply chase the bid up.

Can I buy on auction and make my offer subject to bond approval?
Auction sales are non-suspensive. If you bid on an auction you must be sure that you will be able to get finance and comply with the terms and conditions without any suspensive conditions.
Where do I get the terms and conditions for the auction?

The auctioneer will have a bidders pack ‘of the auction with the necessary terms and conditions included in the pack before the auction. The pack is published and downloadable from the auction website and also available on request. Terms and conditions always forms part of auction advertisements.

What payment is expected from me, should I be the highest bidder at the auction?

The terms and conditions of sale must be clearly stipulated by the auctioneer in all its advertising, on its website and in its Rules of Auction. These terms and conditions will include the percentage of the amount required as a deposit at the fall of the hammer plus all/ any commissions payable, such as buyers and sellers commission as well as VAT (where and if applicable). These payment terms need to be confirmed before each auction with the auctioneer or in its auction terms and conditions as it varies from auction to auction. 

When can I view the property or goods to be auctioned?

The auctioneer will advertise a specific date and time for viewing and if no date and time is advertised, viewing can in most instances be arranged with the contact person as per auction advertisement.

Do I have to pay any arrear costs if I buy a property on auction?

In most instances the buyer is only responsible for any rates and taxes and associated costs from date of occupation. However during some insolvency and other auctions the buyer might be responsible for arears payments, but this must announced by the auctioneer before the auction and stipulated in the auctioneers’ auction terms and conditions.

It stays the consumers’ responsibility to make sure that this enquiry is cleared with the  auction contact person or auctioneer before the auction.

 

If I am not successful on the auction, can I make a higher offer afterwards?

If the property was sold subject to confirmation and the sale wasn’t sold confirmed on the fall of the hammer you are allowed to make a higher offer within the confirmation period as stipulated within the terms and conditions of the sale. The bid must be higher to be considered and falls within the exact same terms and conditions of the auction (including deposit, commissions and VAT payable to the auctioneer). However, the highest bidder has the right to match the higher bid and you will not have another option to increase your bid again. 

May I send somebody else to bid on my behalf at an auction?

If somebody else bids on your behalf at an auction, that person must be accompanied with a Power of Attorney (POA) giving him/her a specific instruction to bid on your behalf on that specific property. The POA must also be accompanied with the relevant FICA (ID and proof of residence) documents of both parties.

What does it mean for the public if an auctioneer is a member of SAIA
  1. SAIA members are obliged to conduct their affairs in a straight professional and straight forward way at all times.
  2. Members are obliged to act with Integrity irrespective of any situation.
  3. Members are obliged to act in a consistent manner at all times, which will result in developing and maintaining the good reputation of the auctioneering Industry.
  4. SAIA members are obliged to refrain from conduct which may bring the auctioneering Industry in any discredit.
  5. Members are not allowed to practice any discrimination against any person based on race, color, religion, sex, marital status or age.
  6. SAIA members are obliged to practice in a manner which is fair and honest and refrain from any conflicts of interest and being prejudice and bias.
  7. Members are required to have detailed knowledge of the following
    • Insolvency act
    • Second hand goods act
    • Companies act
    • Estate agency affairs act
  1. Prevention and combating of corrupt activities act- especially offences relating to corrupt activities to auctions.
  2. Members are at all times obliged to conduct themselves in a manner which will promote good relations between other members and themselves in the auctioneering profession.
  3. SAIA members should protect their clients against, fraud, misrepresentations and unethical practices at and during auctions.
  4. Members are obliged to ensure that they do not collude with buyers in any manner whatsoever.
  5. To maintain the good reputation of the auctioneering profession, members should always act in a good manner consistently.

Above information was gathered from the ‘code of conduct’ of the South African Institute of Auctioneers’.

 

 

 

 

 

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