6 Frequently asked auction questions

The auction floor prides itself on being a transparent and convenient environment. It’s a great place to enjoy a competitive atmosphere while also securing a bargain or two. However, there are many nuances involved with an auction, including the opportunity to enjoy different types of auctions and to understand auction vocabulary. With so much to do and say when heading to an auction, you may have some questions. 

Here are a few common questions regarding auctions: 

How will the final payment be calculated?

Buyers looking to make a purchase at an auction will need to consider a number of factors. Depending on the type of auction (property or vehicle, for example), you will need to factor in additional fees beyond the hammer price. Essentially, your final price will include your bid price, buyer’s commission and VAT. Transfer fees and vehicle documentation fees will also be included if you have bought a vehicle or property at auction. Therefore, before heading to your desired auction, it's a good idea to determine your budget, which should include these additional fees. 

What is a minimum bid? 

A minimum bid, also known as a "reserve price," is the lowest amount that a seller is willing to accept for a property or item at an auction. It serves as a safeguard for the seller, ensuring that the item will not be sold for less than a predetermined minimum amount. If the bidding does not reach the minimum bid, the seller may choose not to sell the item at that time, and the specific lot might be withdrawn from the auction.

Is the deposit you pay at registration refundable? 

Yes! When attending an auction, you are required to pay a registration deposit. This is refunded if you do not purchase anything, or it can be used as part of the payment due on successful bids. A 10% deposit is usually required when registering. 

What is Buyer’s commission? 

The Buyer’s Commission is the percentage added to the hammer price that must be paid by the individual with the winning bid. This commission is charged by the auctioneer as remuneration and can range anywhere between 6% and 12%, depending on the type of auction. 

What happens if you win at an auction and can’t pay?

Winning an auction and then being unable to pay can have serious consequences. Typically, winning an auction creates a binding contract, and failing to pay can result in a breach of contract. Depending on the auction type and terms, you might lose any deposit you've paid, face legal action to recover the owed funds and damage your reputation as a buyer. Auction houses or online platforms could ban you from future participation, and you could be responsible for additional costs associated with relisting. It's crucial to thoroughly understand the terms of the auction and only bid if you are fully prepared to meet your payment obligations.

If I win a bid, when is payment due?

Once you have won your lot, the full invoice amount must be paid to the auctioneer. However, the timeframe is determined by the auction house and is either payable immediately (on the day) or within 48 hours. However, this will be stipulated in the terms and conditions of the auction, which is provided prior to the event. 

Do you need FICA documentation?

Potential buyers looking to bid at auctions must be compliant in terms of the Financial Intelligence Centre Act (FICA). Documents that are required upon registration include: 

• ID Document and Proof of Residence (no older than three months) 
• Representatives of a company are required to have a proxy letter & proxy’s ID document. 

Auction Calendar is an auction listing and browsing platform committed to ensuring you have a great browsing experience. If you have any questions beyond the ones listed above, please do not hesitate to get in contact with our support team - support@auctioncalendar.co.za, as we are ready to lend a helping hand wherever possible.