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Property auction bidding tips

Property auction bidding tips

Many people end up paying too much at a property auction, and for no need. As long as you have done your homework before the auction, you should not be caught out and there should be no need for you to end up in this position. We have put together a few auction bidding tips to assist you. What does your “homework” consist of? Well, there are two things that you should have very clear in your mind before you even take your seat. Firstly you should know what property you intend to bid upon and you should know the property itself.

That’s to say it’s location, the demographics and dynamics of the region in which it’s located, the proximity of schools, shops and other amenities and the potential pool of tenants in that area. You should know the value of the property itself and of other similar properties in the vicinity. Secondly you should have done your mathematics homework – that’s to say you should have a firm limit written down to which you are prepared to bid, and you should stick to that limit.

You should know what you are letting yourself in for if you should win the auction – you’ll have to put down a deposit and pay the auctioneer’s fee, that’s usually 10% of the selling bid plus VAT in South Africa. And you must know what other expenses you have let yourself in for – transfer fees, attorney’s fees, rates and taxes etc. If you’re quite happy about all of those then take your seat.

At the start of procedures the auctioneer usually begins proceedings with a short speech. This differs from one house to another, but in principal will include:

  • A few words of welcome to the proceedings.
  • Whether there are any withdrawn lots, and how the auction will be run.
  • Whether there are any changes to the information on the lots published in the Auction Catalogue – for example whether the rental for a particular property has altered.
  • A declaration of any proxy bids and information on being able to bid on behalf of the sellers
  • The different ways of bidding that are permitted
  • How the purchaser’s details will be obtained
  • How much deposit has to be paid by a winning bidder
  • What you need to do after you have won a lot
  • The basic instructions for auction bidding

The auctioneer will probably recommend that bidders should sit close to the front of the room, although many seasoned bidders prefer to sit or even stand at the rear. Keep in mind these auction bidding tips. When the time comes for you to make your first bid, make it with a major movement such as a wave of your catalogue, or if you have been given on the paddle.

Further bids can be a raised finger, a flick of the catalogue, a nod of the head or even a wink. Look the auctioneer in the eye until such time as you wish to cease bidding. If the auctioneer is jumping the bidding at, say, R5000 jumps, it is possible to step in with a verbal jump in between of, say, R2500.

 
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