Things To Consider When Buying A House On Auction
If you’ve wanted to buy a house in South Africa, with interest rates at 7.50% prime on home loans, now is the perfect time!
The Process
There are a number of property listing companies and websites that have properties on auction. Therefore, you can check out property listing websites such as Property24, PrivateProperty, Rawson Properties and Online Auctions. Africa.
- Do Your Research
As with any kind of property you would be interested in buying, it’s very important that you do your homework regarding the type of property you would like to purchase. Consider these points
- Property Location
- Property Size
- Property Price
- Getting You Loan Application Pre – Approved
The next step in buying your house is getting pre-approved for your bond loan. There are different processes for different banks, so it would be better to contact your bank’s home loan department and find out how they can help you with your home loan application.
- Make An Offer To Purchase and Find Out About Deposits
Once your loan has been pre-approved, you can then continue with making an offer to purchase in regards to the auction property listing that you are interested in. Also bear in mind that most auction houses require a mostly refundable “bidders deposit” that needs to be paid in order to participate in the auction. Make sure to ask your property agent / auction house about the Ts&Cs regarding a deposit.
Different Types Of Property Auctions
According to Abrahams & Gross there are 4 types of auctions, namely;
- Voluntary auctions
- Bank auctions
- Sheriff auctions
- Property In Possession auctions
Each of these auctions have specific rules that you probably should be aware of before bidding on an auction.
How To Avoid Unexpected Surprises
Once you have shown interest in a property on auction and reached out to the auctioneer or property agent that is selling the auction, it would be best to ask for a bidders information pack, get the property particulars:
- information from the deeds office
- outstanding utility rates
- outstanding electricity rates
Once you’ve read all the legal documentation regarding the property, make an appointment to view the property. If need be, ask your most trusted plumber, electrician and builder to accompany you when viewing the property. By doing this, you’re ensuring that you’ll be placing a bid that’s just right for the property. Also, you don’t want to fall prey to voetstoots, only to discover that you’ve bought a property with a set of problems that you’ll have to fix at your expense.
Asking for all information before you bid on the property ensures that you are exercising your consumer rights.
If you’re looking to buy a farm, commercial building or a 2 bedroom flat on auction and don’t know where to start? The Auctioneer has a directory of auction companies that have various properties on offer.
