Property Auction

[Wide]

There is a property auction coming up in a few weeks time, which I would lke to bid on. It's for a deceased estate with no reserve.

Is there any way of finding out the outstanding rates and other utilities on this property. I know that the rates & taxes will need to be settled by the purchaser and no transfer can occur until these are settled. But what about utilities such as Water and electricity? The auctioneers document (and google) is not clear on this- who settles these ? and how do I obtain/confirm the outstanding values ?

I have asked the auctioneers and the (previous) owners regarding outstanding accounts who are giving me the run around, saying these values will be disclosed at the auction. I would really like to confirm these numbers before going to the auction.

Any other risks that I should be worried about ?

 

[noxibox]

Good auctioneers will always provide this information.

 

[The_Other]

Yes. They have to give this upfront. It is part of the CPA act for auctioneers. The problem is they are also probably struggling to get the info. Just stay on their necks about it. You can try your luck to just go to the local counsel and inquire.

Just make sure that you read the terms and conditions very carefully. They HAVE to provide this also according to CPA, well before the auction, and not just on the day. There can be last minute changes but it has to be mentioned before the start of the auction. Most Auction houses make you pay the commission and/or a part of the money on the fall of the hammer.

O and be on the lookout for those ghost bidders . Make sure you can see everyone that is bidding and that everyone that is bidding is registered(also CPA compliance. They have to keep a list of people that is bidding and they must allow you to view this).

 

[Wide]

Make sure you can see everyone that is bidding and that everyone that is bidding is registered(also CPA compliance. They have to keep a list of people that is bidding and they must allow you to view this).

Great point will take this into account. Thus far I have estimated the following as additional/total costs depending on the purchase price
1. Transfer attorneys costs –R20k+
2. Transfer duty -3%over R600k and 5 % over R1m – Assuming not VATable transaction
3. Bond attorneys cost – R20k+
4. Electrical certificate of compliance -R700 plus additional work
5. Auctioneer’s commission 4% + VAT
6. Occupational rent Compulsory – Usually 3 months while transfer is in process but have estimated 5 months at 11% of purchase price
7. Bank Origination fee R7k
8. Outstanding Rates, Taxes , Water and Electricity – R??

Do you think there could be any further costs?

 

[The_Other]

Great point will take this into account. Thus far I have estimated the following as additional/total costs depending on the purchase price
1. Transfer attorneys costs –R20k+
2. Transfer duty -3%over R600k and 5 % over R1m – Assuming not VATable transaction
3. Bond attorneys cost – R20k+
4. Electrical certificate of compliance -R700 plus additional work
5. Auctioneer’s commission 4% + VAT
6. Occupational rent Compulsory – Usually 3 months while transfer is in process but have estimated 5 months at 11% of purchase price
7. Bank Origination fee R7k
8. Outstanding Rates, Taxes , Water and Electricity – R??

Do you think there could be any further costs?

Looks like you have all covered. Have you viewed the house? Is the house guarded? Any repairs needed?

 

[biena]

You missed the most important question.

Is the house occupied ?

 

[Wide]

You missed the most important question.

Is the house occupied ?

House is not occupied at the moment, nor guarded. Its a deceased estate and the surviving spouse seemed ok with the idea of selling it- she did show us around. So hopefully no glitches on that end.

 

[RichardG]

I would recommend you contact your municipality and give them the street address of where the property is situated and the reason for your call, they can give you a clear indication what is outstanding.

Rule of any auction know your prices before your bid(check the market value of the suburb), all prices are excluding vat,commission, etc. Remember if the auctioneer says R10 grand example add another 25 - 30% percent on top of that, additional cost R2500 - R3000 and on the fall of the hammer you need 10 - 20 % deposit available immediately, thereafter you can apply for a bond etc.

 

[Wide]

Thanks- I spoke to 2 colleagues who had similar purchases. Apparently the biggest issue is the delaying tactics used by the estate to transfer the property after sale. The longer they take, the more occupational rental (11% + of purchase price is paid). Evicting the current occupants and getting signatures etc. which could take a year and more.
Does anyone have any advise to ensure a quick transfer, bearing in mind the transfer attorneys are appointed by the auctioneers.

 

[biena]

Thanks- I spoke to 2 colleagues who had similar purchases. Apparently the biggest issue is the delaying tactics used by the estate to transfer the property after sale. The longer they take, the more occupational rental (11% + of purchase price is paid). Evicting the current occupants and getting signatures etc. which could take a year and more.
Does anyone have any advise to ensure a quick transfer, bearing in mind the transfer attorneys are appointed by the auctioneers.

Don't occupy the property until it is transferred ?

 

[Wide]

Don't occupy the property until it is transferred ?

All deceased estate clauses stipulate that once the offer is accepted, the seller has to pay occupational rent/interest. So it still needs to be paid even if not occupied.

 

[Corvus]

There have been cases where the surviving spouse has been allowed to stay on the premises at the same monthly costs (with inflation increases) till death or they move of the premises.