Advice and Opinion

Rawson Auctions Gauteng pioneer "bid with a bond" option

Photo of a Rawson Auctions banner taken at a recent Rawson event

The Rawson Auctions Gauteng franchise has introduced a system which is thought to be a first in South Africa, whereby certain bidders are able to make offers on homes at auction subject to them getting bond finance.

“Traditionally,” explained Rob Whiteley the franchisee for Rawson Auctions Gauteng, “bidders at auction have had to pay cash for property with no suspensive condition in the agreement for finance . However, we have discovered that many potential auction attendees don’t have ready cash – maybe it’s invested elsewhere – but would certainly qualify for a bond and wish to buy a home at auction. In the middle and upper residential home market today there are large numbers of “end user” buyer – someone who wants to live in the property rather than rent out. We’ve therefore arranged with the Rawson Property Group’s bond origination division, Rawson Finance, to prequalify such potential buyers who have conventionally been excluded from the auction process.”

The Rawson Finance Gauteng team will review their credit and financial position and, if satisfactory, will issue them with a Buyer’s Qualification Certificate (BQC). This will indicate the size of the bond for which Rawson Finance believes the buyer will qualify and, armed with the BQC, the bidder can then register and bid at one of our auctions knowing we will accept his offer subject to his getting a bond of the size stipulated. So far as we know, this has never been done before in South Africa and it is, of course, proving very popular indeed.”

Whiteley said, as did his colleague Tanya Jovanovski, franchisee for Rawson Auctions Western Cape, that auctioning a property has become increasingly popular and a more acceptable method of disposal of immovable residential property.

“Quite often”, he added, “this is because a quick disposal has become essential. This can be due to many reasons – relocation, promotion, divorce, financial constraints, downsizing, or even to comply with an Order from the Master of the Court”.

“About fifty per cent of our auction stock,” said Whiteley, “is referred by a Rawson franchisee or agent whose client requires a quick sale. This is, therefore, yet another advantage of being associated with a national group such as ours.”

Whiteley said that while on site auctions still remain very popular, they have this year had great success with ballroom or multiple auctions where many properties are showcased in one central location on one day. At one such event in February, 30 of the 41 properties were cleared (sold) with several bidders buying 4 or 5 properties each.

“Sellers of commercial assets (shopping centres, industrial units, blocks of flats etc) have utilised the auction platform for many years as the preferred disposal method and we are increasingly finding our Rawson Commercial franchisees placing their clients’ properties with us to effect a speedy sale”.

“Higher priced residential properties”, said Whiteley, “are now once again popular with auction buyers and among those his franchise has sold recently include an avant-garde four bedroom cluster in Centurion for R3.1 million and a four storey penthouse in Sandton for R11.4 million.”