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Why Use Auctions As prefered way to buy property

Let’s begin buy considering the reasons that sellers may place their property on auction, it is very common for financial strains as a result of the current economy to pressure sellers into needing to sell in a very short period of time. Others have purchased a new home subject the sale of their current residence and have a limited period of time to conclude their sale. Likewise there are sellers who are forced to sell due to being unable to maintain costs of holding the property; the list goes on and on.........

Whatever the exact reason may be the common factor amongst sellers who choose the property Auction method off selling is that they all are serious about bringing closure to the sale of the property and this allows for purchasers to achieve FANTASTIC DEALS!

The concept of a battle for price between buyers and sellers is certainly nothing new; this has been going on for as long as there has been trade in any format. Property auctions merely expedite this process so when you have a serious seller attempting to achieve the highest price for their asset and a serious buyer attempting to acquire an asset reserving as much equity as possible they are bound to meet somewhere in between. The fact that in property auctions generally a seller has a greater sense of urgency to finalise the sale puts the purchaser in a position of strength and very often the purchaser walks away as the victor of this age old battle.

Obviously there are potential pitfalls for purchasers acquiring property via public auctions as is the case with all conventional property sales also. The key is to purchase responsibly; by this I mean that one should gather as much information as possible prior to bidding on an auction. You do this by asking questions such as:

·         What are the auction rules and procedures?

·         Where can I inspect these rules and procedures?

·         Are there registration fees payable?

·         Are there deposits payable?

·         What do I pay over and above my bid?

·         Is there a reserve price on the property?

·         How can I view the property?

·         Who is responsible for any defects on the property?

 

By ensuring that one has the answers to such questions above you remove the risk from your purchase and ensure that the bargain you buy turns out to be just, a Bargain rather than a “disaster in hiding”.

 

Property Auctions take various formats; most of these formats are variations of the following:

·         Sale in Execution property auctions

·         Private Treaty property auctions

·         Multiple Property Auctions

 

Sale in Execution property auctions- these are auctions of fixed property conducted usually by the sheriff of the High or Magistrate’s court in execution of a court order stating that the property must be sold. Whether this is because of a failure to make bond payments, forced settlement due to divorce proceedings, sale from a deceased estate the outcome is the same the court has instructed the sheriff to auction the property and this is exactly what he does. Sale in execution is by far the most risky format for purchasers. As the buyer at SIE the

Municipal and Levy arrears are for your account and it can prove to be extremely difficult to attain accurate figures in this regard, likewise any costs pertaining to and actions  required for eviction proceedings fall on the shoulders of the purchaser. There is very seldom access to the property to inspect or view prior to SIE auctions and this adds to the risk one takes because any defects are your baby. With these factors in mind one should exercise extreme caution when purchasing in this manner.

 

Private Treaty property auctions- This form of auction is generally done on an individual basis on site, where a private seller wishes to sell their property in the shortest possible time for a number of reasons addressed previously in this article. The Seller usually pays the auctioneer substantial marketing contributions which are not refundable in the event of a seller declining an offer arising from the highest bidder on auction. This serves as fantastic motivation for a seller to confirm the sale even if the highest bid is not exactly what they were expecting. Moreover the auctioneer would also be reluctant to proceed with a private treaty auction unless they feel that the “reserve price” is reasonable and easily achievable

One can easily conclude that this too assists the purchaser to purchase price advantaged property. Private treaty Auctions allow for far safer purchases than SIE in that purchasers are able to view the properties prior to the auction commencing and figures quoted by the auctioneer which may be for the purchasers account are far more reliable. Also in most private treaty auctions the buyer is guaranteed vacant occupation of the property upon registration of transfer.

 

Multiple Property Auctions- multi auctions are typically hosted at a venue in the vicinity of the properties on sale, these sort of auctions have a pretty much unlimited amount of properties all auctioned of one after the other at the same event. The more properties listed the more opportunities there are for a YOU , the buyer to snatch up a great deal. The reason for this is simple the greater the multi auction the higher the chance of an oversupply of properties occurring and as most purchasers understand that

oversupply = less demand = LOWER PRICES! As in the private treaty auction addressed above buyers are usually able to view the properties on specific viewing days or by prior arrangement with the relevant agent. Likewiseany figures which may form part of the purchaser’s liability are clearly stated and generally very reliable. There are also readily available brochures, info packs and documents stating auction rules & procedures as well as

The conditions of sale allowing you as an investor or home buyer to be very well prepared prior to bidding on the property at Multi Auction.

 

All formats of property Auction offer extremely lucrative opportunities for buyers, the more you know the better your chances of securing the amazing deals. We can assist you in gaining the required skills and knowledge, we will also be very happy to allow you access to our extremely sought after list of price advantaged properties. Complete the enquiry form on www.repoproperty.co.za  to instantly become a preferred member of our database for serious buyers. Not only will you then receive notifications of existing and new listings immediately as they become available but we will be in touch personally to gain an understanding of your specific requirements. Thus allowing us to provide you with EXACTLY WHAT YOU WANT!

Complete the simple enquiry form and submit your details now.

 

 
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