There’s a common misconception that property auctions are the ideal hunting grounds for bargain hunters looking to take advantage of desperate sellers or cheap bank-owned properties. However, this could not be further from the truth.
There has been a major shift within the property industry as more South Africans opt to spend their money on the auction floor in order to find their next home or investment property. The popularity of property auctions can be attributed to a number of reasons, including fast completion times to close a sale and competitive pricing, to name but a few.
Auctions offer a practical solution for buyers and include a wide range of benefits:
#1: A well-priced investment
Buyers and sellers understand that buying a property on auction can be an excellent way to receive a good price. However, another misconception is that sellers looking to offload their property urgently are willing to do so for next to nothing. This is not the case, but you can expect your next investment property to be well-priced. Essentially, an auction provides a competitive buying environment in which the potential buyer and seller both win.
#2: A transparent process
Auctions are straightforward and to the point. Potential buyers have done their due diligence and have the necessary funds available to make the purchase. Sellers have the responsibility to divulge all property details, including any damage the property may have, while the potential buyer will also have the opportunity to ask the seller or auctioneer about any damages or issues regarding the property. Whether it’s structural problems or leaks, auctioneers are required to bring all faults to your attention. In addition to this, once you have accepted any problems, the process is quick and efficient.
#3: It can be quick
Prospective buyers often choose to purchase properties on auction because the process can be fast and efficient. While buying a home via the traditional method can take anywhere from a few weeks to several months, auctions have a much faster completion time. This is because auctions eliminate lengthy negotiation times, which will allow you to walk through the doors of your new property in no time.
Additional benefits of buying your next property on auction:
- The seller is guaranteed to sell the property and is not just “testing the market”.
- There are no transfer duties. However, a 10% deposit and *sheriff fee are payable.
- All buyers follow the same terms and conditions and compete fairly with each other.
- The closing date is established beforehand.
How do I find property auctions?
There are many resources online to help you find a real estate auction that meets all your requirements, and Auction Calendar is the top destination for all your auction needs. Our website and app allow you to browse a range of property auctions across Southern Africa. You also have the opportunity to set up personalised alerts based on your selected categories and receive notifications to ensure you do not miss out on finding your next investment property.
The strictly regulated process and the immediate benefits of real estate auctions ensure purchasing an investment property on auction is an excellent investment for potential buyers. Take advantage of the range of benefits listed above and start browsing for your next property auction.
*Sheriff Fee: Sheriffs function as the executive arm of the court once the bank has applied to the court to attach the property and sell it to the highest bidder. As such, the purchaser is obligated to pay the sheriff fees or commission, which is calculated as follows:
- 6% on the first R100 000.00 and
- 3.5% on R100 001.00 to R400 000.00 and
- 1.5% on the balance of the proceeds of the sale
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