The ClareMart Auction Group presents the second in their series of “How’s, When’s and Why -To’s” for sellers, buyers and those interested in commercial, investment, residential and luxury property as well as movable assets. The directors and managers within the Group will over the next few months be contributing their knowledge and expertise in order to educate the auction market and answering the many frequently asked questions relevant to the industry.
Farrell Perling, Sales Director, feels that the second instalment in the series should be advice for those who are new to bidding at auctions and are uncertain on how to bid on their preferred property. “The auction model is being adopted by more South Africans as a viable opportunity for acquiring and disposing of property. Our Group is tabling higher numbers of first time bidders attending our auctions than ever before. There has been a dramatic increase in attendance and registration at our auctions nationwide over the past two year period and much of this increase is due to first-time bidders who are developing an interest in auction” says Perling.
In light of that increase by those new to the mechanism, the Group fields many similar questions on a frequent basis regarding how to bid on and secure a property at auction. Perling feels that there is straightforward advice that all new bidders would benefit from, regardless of whether the property be residential, commercial or of an investment nature or whether the auction be a Multiple Property Auction or on-site.
How to Bid On Your Preferred Property at Auction
• Do Your Research:
“Prior to the auction, research the property and the property market extensively in that particular area. Ask the listing agent for a full catalogue information pack or peruse our website as well as obtain facts regarding recent sales prices in that area. Inspect the property via show days or by appointment and after doing a full due diligence you should be able to decide on a maximum bid price that you are prepared to pay” says Perling.
• How do I set my Budget and Finance?
Perling adds that those new to the auction process must remember that the commission and deposit are payable immediately, usually by EFT, after auction and should their bid be the highest, they must allow for that in their budget. It is also imperative that bidders familiarise themselves with the Conditions of Sale as well as the Rules of Auction which governs the auction process and may differ between properties.
• How do I get started on the day?
On arrival bidders are required to register by means of providing the auctioneer with a copy of their valid identification and valid FICA documents. “At this stage a bidder will be given a bidder’s card with their bidder’s number. This is to be held up to indicate to the auctioneer that you are bidding on the property” says Perling.
• How and When do I bid?
Different bidders have alternative strategies as to when they may wish to enter the bidding process on a particular property and in what increments they wish to bid. Once the bidding slows down and the auctioneer is left with a single remaining bidder, the auctioneer may ask for final bids “going once, going twice” and then knock down the property to the highest bidder.
• What happens after the Hammer Falls?
“Finally regarding the fall of the hammer, bidders must heed that the offer made at auction, unless stated otherwise, are subject to the seller’s acceptance. The confirmation period is usually 7 working days during which time the seller may accept the offer, although many sellers do accept immediately if the final price is acceptable to them” adds Perling.
• How and when do I pay for my Property?
The bid on auction is non-suspensive and the purchaser would usually have around 30-45 days from the date of acceptance from which point they would need to provide the necessary guarantees. It is therefore important for bidders to be certain prior to auction that they have the funds available or access to the necessary funds in order to meet the stipulated deadlines.
“Once you have done your homework with regard to the property and decided on what your budget is, the auction process gives you an opportunity to bid in a transparent environment and hopefully acquire the property, should you be the last person standing” adds Perling.
For information on the auction process or regarding available properties and up-coming auctions contact the ClareMart Auction Group on 021 425 8822 or visit www.claremart.co.za
This information is published for general information purposes and is not intended to constitute legal advice. Specialist legal advice should always be sought in relation to any particular situation. Property Wheel will accept no responsibility for any actions taken or not taken on the basis of this publication.