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#auction #investing #propertyadvice

In this episode I share with you the things you need to know before considering buying a property on auction. I explain and share with you, the three basic types of sales that fall into this category, where to find repossessed properties for sale and the Benefits and Risk of buying a property on auction. I explain how auctions work? what to expect - what to do.
Auction sales are on the rise in South Africa and have grown by a huge margin during the course of this year. However, despite the trend, it would be wise to realise that buying a property on auction does not necessarily mean that you will always be getting a good bargain. Before buying anything, a purchaser should always be aware of all its obligations. It is important to know the rules of the auction game long before you decide to get involved, which is regulated by section 45 of the Consumer Protection Act 68 of 2008.
At an auction bids are open. You know what the buyers you are competing with have bid and, if you want to secure a given property, you only need to beat that bid by a small amount.

Timestamps
0:00 Intro
2:50 The 3 types of property
3:21 What does bank mandated sales mean?
4:16 What does property in possession mean?
6:51 Where to find repossessed properties for sale
6:51 Benefits of buying at an auction
7:30 Risks in buying at an auction
13:04 How does auctions work?

On the day of the auction
1. Register as a bidder and get a number or bidder’s ‘paddle’.
2. You will need your ID document, proof of your residential address (such as a municipal account), and the registration fee, usually payable by EFT or bank guaranteed cheque and is fully refundable if you decide not to bid after all, or if your bid is unsuccessful.
3. If you are bidding on behalf of someone else or a close corporation (CC) or a trust, you will also be required to complete the registration process. You may also be asked to sign an undertaking accepting responsibility if the person or entity drops out after a successful bid.
4. If your bid is immediately successful and not subject to approval, you will need to sign off on the conditions of sale confirming your purchase of the property.
5. You will be required to pay the auctioneer’s commission (usually 10% of the buying price plus VAT) and a deposit of at least 5% of the buying price, less your initial registration fee. The balance of the buying price will only be payable on transfer of the property.
6. Remember to double check when the risk in the property passes to you before you leave the auction site. This will either be on fall of the hammer or on registration of transfer. This is important to allow you to make the necessary arrangements for insurance.
After the auction
Should you default on the sale after the auction, the seller will have the right to take legal action against you as you have signed a legally binding agreement.
If you can navigate the auction market properly, you may find a bargain
Familiarise yourself with these key essentials and it is possible to hunt down a bargain property that is being sold on auction.
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