Auctions
The concept of friendly or “non-disstressed” auctions are explainded in the videos. downloadable documents below
Videos and Documents
Process explained in an English Video
Process explained in an English PDF Document
Proses verduidelik in ‘n Afrikaanse Video
Proses verduidelik in ‘n Afrikaanse PDF Dokument
Auctions Explained
Introduction
PJC Attorneys specialises in online auctions and would like to offer you guidelines in this regard. Online auctions allow all participants to have an equal and fair chance of competitive bidding, just as they would at an auction taking place in person.
The auction method has been round for centuries and it continues to thrive because it is one of the fairest and most transparent ways to conduct a sale. Both buyers and sellers have the opportunity to plan a strategy that would lead to a successful transaction.
An auction is the sale of property (movable or immovable) to a buyer who has won a bid against other potential buyers for the item being sold. An auction occurs during a specified time period at a venue or online
Auctions are a fast and effective way to sell properties. The process is a little different to an ordinary sale in that there are different rules and terminology that apply. Auctions are exciting and presents a timely and strategic alternative to traditional sales methods while creating great opportunities for both sellers and buyers.
The Firm deals with voluntary auctions of non-distressed properties. A voluntary auction is a sale where the owner chooses an auction over traditional marketing methods. Parties to these auctions are willing sellers and willing buyers. This in turn creates an amicable atmosphere of goodwill between all the parties involved.
Properties on auction are marketed aggressively on various platforms and by any applicable means. The Firm spends time, money and a lot of effort in creating an air of excitement surrounding an auction and is only rewarded upon the successful conclusion of an auction.
The residential property market fluctuates between a buyer’s market, where supply outweighs demand and a seller’s market where demand exceeds supply. In both scenarios auctions remain an effective way to unlock market value. Residential properties being sold via auctions is a worldwide phenomenon with Australia being the benchmark.
In word-class cities like Sydney and Melbourne residential properties being sold by auctions are the order of the day.
The fact that properties are sold subjects to a Reserve Price give sellers amble peace of mind. Buyers are willing to compete for unique opportunities to attain and secure a good deal or bargain.
The global success of selling property by auction provides a clear blueprint and it may redefine a how property is bought and sold in South Africa.
PJC Attorneys offers a transparent service with the interests of both sellers and buyers being of the utmost importance and as such deals to the benefit of all parties concerned are negotiated.
Benefits of Auctions
- By means of intense marketing and transparent negotiations auctions generally results in quick sales. Sellers don’t wait weeks or months for an offer to consider as per the conventional way of selling property. As a result of high impact advertising campaigns over a relatively short period of time, buyers approach auctions instead of waiting on the market to lend an opportunity.
- Both sellers and buyers can bargain and negotiate during a process that lends itself thereto.
- Buyers are motivated by the fact that a auction provides them with an opportunity at a certain time to acquire property at a good price.
- Auctions create “word of mouth” with regards to the possibilities of a certain property. The property gets noticed and the fact that a property is on auction indicates to prospective buyers that sellers mean business and would like to sell their properties.
- An auctioneer will assist a seller in setting up a market related reserve price.
- Auctions create a sense of urgency and excitement; buyers compete intensely to make the most of the opportunity presented to them.
- Auctions attract qualified buyers, persons or entities which have the means and desire to purchase the applicable property.
- The fact that only certain dates are allocated as to when the property can be inspected by prospective buyers makes it a lot easier on the sellers.
- An auctioneer focuses on a specific property at a given time and puts all his or her energy into a high impact marketing campaign.
Helpful Hints and Strategies to consider when buying a Property on Auction
- Once you have identified an auction, start gathering more information about the property:
- Information from the deeds office.
- Outstanding municipal account.
- Outstanding account with a body corporate if applicable.
- In addition:
- Secure financing in advance.
- Conduct in-person inspections before the auction, if need be, ask a trusted plumber, electrician and or builder to accompany you when viewing the property. Take your time to familiarise yourself with the property.
- Do thorough due diligence on the property history and local market value.
- Ensure your FICA documentation is in order and pre-register online.
- Read the Conditions of Sale and ensure that you understand all terms and conditions including the deposit amount, buyer’s commission and the methods of payment.
- Familiarise yourself with the details of the process that will follow, especially the applicable dates.
Auction Terminology
An absentee bid is where the auctioneer will bid on your behalf if you are unable to participate in the auction. The bidder will sign a proxy for a person to bid on his behalf. Such a proxy should make reference to the maximum bid that may be bid on your behalf.
Anti – Sniping
Auctions will have an anti-sniping mechanism in order to give all the bidders an equal opportunity. This means that if there is a bid in the 5 minutes before a lot closes. The other bidders will be given 10 minutes to place a counter bid. Much like the going, going, gone at the end of a live auction.
Anti – Ringing
Ringing in this context is defined as a group of buyers participating in an auction who collude not to bid against one another in order to keep the auction price low. No ringing shall be permitted and if the auctioneer suspects that bidders are involved in such activity, he shall be entitled to suspend or terminate the auction, or prohibit those bidders suspected of such activity from making any further bids.
Auction
A public event at which goods or property are sold to the highest bidder during a specific period. Auctions be held at a venue as a live event or online using a bidding platform.
Auctioneer
A person who conducts and regulates auctions by accepting bids and declaring goods or property sold.
Bid
The price or amount that the potential buyer places during an auction.
Bidder/Registration number
The number assigned to each registered bidder. This allows the bidder to remain anonymous.
Buyer’s commission
The amount the buyer pays the auctioneer upon a successful sale. Such commission payable over and above the hammer price. This is typically calculated as a percentage of the selling price.
Ghost bidding
Where sellers and/or auctioneers use fake bidders to place false bids on an auction in an attempt to increase the price of property or goods they are selling. This is an illegal practice in South Africa. This is different to Vendor Bidding.
Hammer price
The final/selling price at an auction, also known as the “fall of the hammer price”.
Outbid
When a bidder places a counter offer/bid higher than the bid standing.
Reserve Price
Before an auction is initiated an owner will set a reserve price in collaboration with the auctioneer. This price reflects the minimum amount an owner will accept for a property available on an auction. Once an auction has concluded negotiations could follow in order to possibly make a deal between a bidder and a seller.
Starting price
The lowest possible bid that the first bidder places.
Vendor bidding
The process whereby an auctioneer or another person or the seller is allowed to enter bids at an auction on behalf of the seller up to a stated reserve price in order to ensure that a market-related sale is achieved.
Voluntary auctions
A process whereby the owner chooses an auction instead of traditional marketing methods to sell a property.
Processes to be followed in Practical Terms
PJC Attorneys acts as a partner to a seller and we work as a team to sell a property quickly at a market related price. Clients who want to sell their properties should contact PJC Attorneys by completing the form provided on this website. A proper consultation will follow in which the seller will be assisted with setting a reserve price and the applicable seller’s mandate will be agreed upon.
In order to facilitate a well-coordinated marketing campaign a 60 (Sixty) day mandated period is advised, also known as “The sixty-day solution”. Results are achieved by vehemently marketing a specific property over a short period of time.
How to register as a bidder?
Bidders register by completing the registration form provided on this website. The firm will confirm that you are registered for an auction and provide you with a unique registration number. This registration number is for your safe keeping.
Upon your successful registration you will be provided with a Property Condition Report in terms of the Property Practioner Act No 22 of 2019 and the Conditions of Sale to be held.
Process of Auctioneering
Auctions are normally over the course of a week in order to give bidders amble opportunity to place their bids. Bids are placed by using the Bid Form provided on this website. It is really that simple. Bids will be displayed on the website with your unique registration number. All bidders are thus informed by referring to the website.
Upon the successful conclusion of an auction, the winning bidder will provide the auctioneer with the signed Conditions of Sale.