Buying a property on auction could be a gratifying experience, but buyers have to be aware of their rights, possible pitfalls and what their legal obligations are.
The starting point for all property auction buyers must be to determine the value of the property and decide what they are prepared to pay, according to expert auctioneer Pieter Geldenhuys at one of the country’s leading auctioneering houses, Bidder’s Choice.
“It is very important not to exceed the valuation when you are bidding,” he advises.
“Buyer’s remorse is then almost unavoidable. If the property goes for much less than the valuation and nobody else is bidding, you have bought a bargain.”
Geldenhuys also advises that a prospective bidder should ask the auctioneer about any outstanding rates and taxes and whose responsibility these would be before going into the auction process.
Bidders must familiarise themselves with the conditions of the sale also with regard to historic debts and other costs.
If a prospective buyer is interested in a property, the buyer must secure fi nuancing for the property before entering the bidding process, since auction sales are not subject to a bond. Also, ensure to have the correct amount available for the deposit in the event that you win the bid.
Geldenhuys warns that, although an auction buyer enjoys all the usual legal protection present in contractual arrangements, buyers must ensure that they know what these legal protection mechanisms mean. A buyer cannot feign ignorance and must at all times arm himor herself with information.
“If buyers do not comply with the conditions of sale on auction, they will have to deal with the consequences of that decision,” Geldenhuys says.
“If a buyer does not comply, damages will be payable as a result. The terms and conditions of the sale normally address non-performance from the buyer.”
It is very important not to exceed the valuation when you are bidding on a property.
Pieter Geldenhuys: Expert auctioneer at Bidder’s Choice