While all signs point to positive growth in the property market, affordability will remain a key driver throughout 2025. To that end, purchasing quality properties on auction continues to be a viable option. That’s the word from Park Village Auctions’ Roy Lazarus, who sheds light on what to consider when buying an auction property.
According to Lazarus, the first thing to consider when evaluating an auction property is your budget and the amount to finance: “To determine how much you’re willing to spend on a property, firstly, one needs to assess its actual value and personal worth to you as a buyer. One way to determine value is to look at past sales, which will give you a quick guide on what the property is worth.
“Thoroughly inspect the property on the viewing day, consider the area and surrounding amenities, and examine current area listings. Remember, it’s all about location, location, location. Also, factor in any repairs and modifications you might want to make.
“Once you’ve settled on a budget, stick to it. It’s easy to get caught up in the excitement of the auction or a bidding war and go over your limit. But remember, once the hammer falls, this is a legal and binding offer.”
Another crucial aspect to carefully consider is the Conditions of Sale. This includes the confirmation period, outstanding rates and taxes, commission, and VAT. Ideally, obtain a copy of the Conditions of Sale before the auction. Lazarus further notes, “Don’t hesitate to ask questions on the auction day”.
Lazarus explains: “The confirmation period varies, during which the bidder’s offer is considered. The highest bid will be accepted or rejected in the confirmation period if the property has a reserve. Please note that the seller can confirm before the confirmation period expires. There is no reason why the seller has to wait the entire confirmation period to accept or reject the offer.”
Regarding rates and taxes, Lazarus clarifies that the conditions of the sale dictates who is liable for these expenses: “There’s no hard and fast rule for arrear rates and taxes. Normally, the buyer will be responsible for the arrears if the sheriff sells the property.”
In terms of auctioneer’s commission (which varies between auctioneers) again, Lazarus urges bidders to refer to the Conditions of Sale for the exact details regarding whether a buyer’s commission is paid and at what rate.
Bidders should also remember that auction properties are sold voetstoots or ‘as is’. This means the property is sold with all its faults, and the seller has no legal obligation to rectify any issues. If the seller is aware of any issues it is the seller’s responsibility to disclose this to all potential buyers.
In closing, Lazarus advises: “Consider other factors: fixtures, fittings, plants, swimming pool accessories, generators etc. Are they included in the sale price? If the property has a tenant, ask for a copy of the lease so the bidders know exactly what they are buying.
“Most auctions insist that a deposit be paid on the fall of the hammer. Make sure that you budget for the deposit to be paid.
“Auctions can be a great way to invest in property, provided you have done your homework to make an informed decision.
PVA is hosting the following property auctions to whet the appetites of various buyers found at www.parkvillageauctions.co.za: