Purchasing a Property through a auction.

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DODGER523

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Hi All.

I would like to purchase a property through a auction. I have been monitoring SheriffHQ.co.za. I have now found a property that interests me.

Are there any tips or points I should be aware of before going to the auction?

Any help would be greatly appreciated.

Stay Safe
 
DODGER523 said:
Hi All.

I would like to purchase a property through a auction. I have been monitoring SheriffHQ.co.za. I have now found a property that interests me.

Are there any tips or points I should be aware of before going to the auction?

Any help would be greatly appreciated.

Stay Safe
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Tip 1. Take a few thousand in cash, as you need to register beforehand on site.

Tip 2. Listen carefully to the outstanding rates and taxes and levies, as you need to pay that usually (the new buyer)
 
zerocool2009 said:
Tip 2. Listen carefully to the outstanding rates and taxes and levies, as you need to pay that usually (the new buyer)
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^auction dependant.

3. Have deep pockets for potential renovations.
 
Tman* said:
^auction dependant.

3. Have deep pockets for potential renovations.
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Tip 4. Listen well. And read . Some auctions do not guarantee a vacant property ( I think the term they use is unhindered access or something like that ) which means possibly a tenant who refuses to move out . Add 40k for eviction if it get there.
 
Make sure to read the auction rules thoroughly. There could be any number of "interesting" clauses. Also remember you will likely need to add the auctioneers fee on top of the bid price, so keep that in mind.
 
Buyers usually pay the auction fees commission which is around 10% plus vat.
 
Make sure you have a pre approved bond (or if you doing a cash buy).

The auctioneers commission is usually 10% of the buying price.

Related to rates and taxes and levies, those guys never lose, nor does a bank. If something is at an auction, it means the poor owner cant stand on any feet. Truly very sad
 
zerocool2009 said:
Make sure you have a pre approved bond (or if you doing a cash buy).

The auctioneers commission is usually 10% of the buying price.

Related to rates and taxes and levies, those guys never lose, nor does a bank. If something is at an auction, it means the poor owner cant stand on any feet. Truly very sad
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Didn't a court case recently prohibit the tranferring of outstanding rates to a new owner?
 
Speedster said:
Didn't a court case recently prohibit the tranferring of outstanding rates to a new owner?
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Not that I am aware off. Example, I know a few court cases (self involved), levies is past R300 000 in arrears. Section 66 will be done shortly, and the funds will be taken off the purchase price. So I hope it gets the minimum reserved.
 
zerocool2009 said:
Not that I am aware off. Example, I know a few court cases (self involved), levies is past R300 000 in arrears. Section 66 will be done shortly, and the funds will be taken off the purchase price. So I hope it gets the minimum reserved.
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If the funds are being taken off the purchase price, then the seller is settling the outstanding fee, not the buyer.
 
Speedster said:
If the funds are being taken off the purchase price, then the seller is settling the outstanding fee, not the buyer.
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I know of a few properties, the debt is 30% more than the value. So what happens with that? Who loses?
 
When you purchase an auction property you will inherit all benefits and liabilities along with it and as such have no recourse so anyone doing so should have done their homework thoroughly including building plan approvals etc
 
Speedster said:
The seller. If they can't cover their outstanding bills they have to file for bankruptcy.
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Example, debt is R1500 000, value of tye building is R1000 000

Clearly the seller will walk away with nothing. Shortfall off R500k here
 
zerocool2009 said:
And the R500K the angels wouldnt pay.

The odds for a bid to go past R1.5kk in this example is very-very slim.
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The 500k would be the loss on the bank essentially if the bank was the lender. In terms of IFRS the banks would have probably provided the full amount as a provision by then. So anything money received would be income.
 
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