Estate Living Magazine Issue 30 Smart Environments June 2018 | Page 15

a pre-approval for a certain amount well
in advance of the auction, and there
are some important precautions that
potential purchasers need to take.
'The first of these,' says Rudi Botha, CEO
of BetterBond, 'is the need to establish
the market value of the property before
the auction, so that you can set a limit on
how much you are prepared to bid and not
get carried away in the excitement and
competitive atmosphere of the auction.'
Secondly, good auctioneers will also be
able to supply you with copies of the title
deed, the site diagram, the plans of the
property, any lease agreement and the
zoning certificate if relevant. And internet
research on estate-living.co.za will reveal
more details about the estate and area,
such as local schools, shopping centres
and other facilities.
For the buyer, meanwhile, there is no
risk of overpaying for a property, as he/
she determines the correct market value.
David Soutter, CEO of Reliance Auctions,
says: ‘By placing a property on auction
the seller has made his intentions clear,
is a real seller, and is not just testing the
market. The buyer is obliged to raise the
finance prior to the auction, and with the
fall of the hammer immediately enters
into a sales contract.'
‘The transaction is clean, and accompanied
by a substantial non-refundable deposit.
This is a major benefit in a market where
the banks determine the approval of a
sale, which too often falls through due to
banks declining the finance,’ says Soutter.
Therefore, buyers at a property auction
need to do a bit of preparation and obtain
'Third,' says Botha, 'potential buyers must
thoroughly check the Conditions of Sale
before an auction, so that they understand
exactly what is being offered for sale and
exactly what else they might be taking
on, bearing in mind that a winning bid
at auction is legally binding and cannot
be retracted later without considerable
financial loss.'
There is often a provision, for example,
that the buyer of an auction property
will be responsible for any outstanding
municipal rates, or levy arrears in the
case of Sectional Title property. There
could thus be a substantial amount to
pay – in cash - in addition to the auction
price, which could make the property a
much less attractive proposition.
He says the Conditions of Sale could
also stipulate if the auction price carries
interest from the hammer fall until the
transfer of ownership is registered, or if
there is still a tenant in residence whose
lease needs to be honoured. In addition,
the Conditions of Sale can be amended
right up until the day of the auction, so
An auction is an easy and
efficient process for both parties"
it is worth double-checking them before
you sign acceptance and go ahead with
your bid.
'Lastly,' says Botha, 'potential buyers must
ensure that their financing is in place well
before the auction date, because auction
sales are non-suspensive, which means
that they are not conditional on your being
able to get a bond.'
'As a winning bidder, you will usually be
required to pay a deposit of 5% to 10%
of the purchase price immediately, in
cash, and possibly also the auctioneer’s