Purchasing a Property through a auction.

beefymoocow said:
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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Banks dont make losses, they rather buy it back
 
quovadis said:
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
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Surely you purchase the property as is, but without any of the associated debt etc (unless of course this is explicitly included as a part of the sale agreement)?
 
Eric said:
Not true. It's the preferred method of a quick sale sometimes. No fees payable by the seller and it can be sold voetstoets.
But as mentioned, get municipal debt in black and white beforehand.
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As you say, there are various reasons for auction. One of the reasons is sale in execution (which sheriff sales tend to be) in which case the previous owner has found themselves in deep poo.
 
Speedster said:
Surely you purchase the property as is, but without any of the associated debt etc (unless of course this is explicitly included as a part of the sale agreement)?
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The majority of sheriff auctions you accept liability for any associated municipal, utility and HOA fees etc still owing which is why they usually state them as accurately as possible but you should always confirm for yourself. Furthermore it truly is a voetstoots purchase - you have no recourse should you find out the garage was built or extended without plan approval or the front wall was against HOA rules or there's structural problems etc.
 
quovadis said:
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
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I don't think that's 100% correct (but I am probably wrong).
 
Wow thanks all for the awesome response.

1. It will be a cash purchase so I wont worry to much about the plans as we have other plans for the property.

2. Hypothetically if I where to buy with the intention of getting finance and I would then need plans to secure finance failing which I guess I would loose my deposit?

3. My only real concern is the Rates. How would I go about finding out what is owed?

4. If the tenants will not vacate what recourse do we have?
 
DODGER523 said:
Wow thanks all for the awesome response.

1. It will be a cash purchase so I wont worry to much about the plans as we have other plans for the property.

2. Hypothetically if I where to buy with the intention of getting finance and I would then need plans to secure finance failing which I guess I would loose my deposit?

3. My only real concern is the Rates. How would I go about finding out what is owed?

4. If the tenants will not vacate what recourse do we have?
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3. My understanding (but check this with a lawyer) is that if any outstanding costs are not explicitly indicated you aren't liable for them. Buying on auction guarantees a "clean" property.
 
DODGER523 said:
1. It will be a cash purchase so I wont worry to much about the plans as we have other plans for the property.
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If the building was not approved and the plans have not been lodged the municipality may refuse future renovations or changes or demand the structure be demolished. Either way the cost would be yours. They're a pain in the ass and where there is historical non-compliance they become bigger pains.

DODGER523 said:
3. My only real concern is the Rates. How would I go about finding out what is owed?
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The sheriff should be able to provide a recent statement - make sure that where usage is high you include another month or two of usage as a buffer. You could also hire a rates clearance company to get a current statement too. Either way also visit the property if you have access and look at the readings vs the statements.

DODGER523 said:
4. If the tenants will not vacate what recourse do we have?
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If the tenants have a valid lease agreement, nothing as you'd be bound by the lease agreement. As long as they renegotiate the change in ownership and pay you the agreed amount you are contractually bound. If they default then the usual process for evicting a tenant etc.

Speedster said:
3. My understanding (but check this with a lawyer) is that if any outstanding costs are not explicitly indicated you aren't liable for them. Buying on auction guarantees a "clean" property.
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Buying on a sheriff auction means voetstoots in the most pure sense of the word imaginable so any outstanding rates/taxes/utilities/home owners fees etc with respect to the property you will be liable for. The liability is assumed by the buyer in the case of a sheriff's auction.
 
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DODGER523 said:
Wow thanks all for the awesome response.

1. It will be a cash purchase so I wont worry to much about the plans as we have other plans for the property.

2. Hypothetically if I where to buy with the intention of getting finance and I would then need plans to secure finance failing which I guess I would loose my deposit?

3. My only real concern is the Rates. How would I go about finding out what is owed?

4. If the tenants will not vacate what recourse do we have?
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4. As above. Any valid lease agreements remain valid until their date of expiry. But you don’t have to renew it .

If the lease agreement has expired or there isn’t one , and they won’t move , the only legal way is the eviction process , roughly 3 to 4 months and 30k to 40k which in theory you can recover from the illegal occupiers . Not sure how COVID lockdown regulations have affected the eviction process though . Before level 1 there was no evictions not sure now
 
I would like to know who owned the house. Leader of the 28s goes to jail for 2 years, for some crap, bet if he comes out he will take his house back. :D
 
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