Quick-fire Auction Questions Answered

Online auctions are attracting hordes of new buyers who realise that they can acquire top-quality assets at better-than-market rates with the click of a button. So says Park Village Auctions Director, Clive Lazarus who answers the most frequently asked questions about auctions.

Question: Are all assets sold on auction repossessed?

Answer: Not all auction assets stem from bank repossessions. Assets can also stem from:

• Voluntary auctions, where a seller chooses to put their assets up for auction;
• Deceased estates, where the executor will choose to realise assets to fulfil the deceased’s obligations.
• Business rescue matters, where some assets are sold to raise liquid capital for a business to continue operating; similarly
• Liquidation auctions see all of a company’s assets liquidated to satisfy creditor obligations before closing.

Question: What are the costs to participate in an auction?

Answer: At the very least, you must register to bid—a bid taken from an unregistered person is invalid. Most auctions require a deposit to register.
The deposit is refundable if you did not purchase anything.
If you win a bid (successfully, purchasing an asset) you are obligated to pay the full amount on which the hammer fell. You also liable for VAT, commission and other applicable auction fees.

All costs are announced in the rules of the auction before the action starts.

Question: When is my final payment due?

Answer: For PVA vehicle auctions, full and final payment is due within 48 hours. The buyer’s responsibility is to have the funds available—even if by securing finance—before the auction.

This goes for warehouse sale goods as well. When it comes to property, bidders must know the auction rules before bidding. Often, the deposit; the auctioneer’s commission and VAT are due on the fall of the hammer (meaning the same day). Then, there will be a short period in which the buyer must produce “guarantees” for the outstanding remaining amount, which will also carry a deadline.

Question: Can I view a vehicle or house before an auction?

Answer: Yes. We encourage bidders to do so.

Question: Are online auctions safe?

Answer: Auctions hosted by legitimate, reputable auction houses are safe. Unfortunately, though, there are opportunist scammers that have jumped on the online auction bandwagon.

It’s best to check if the company is a registered SAIA member. Scrutinise the logo and business details; scammers create very close replications. Verify the business and their banking details and confirm the asset’s location. If you’re unable to view the asset yourself, send someone on your behalf to confirm its existence—it’s always wise to view the asset’s condition before bidding, too.

No one should ever feel bullied into a paying a deposit, especially if they have not authenticated the company. All, established auctioneers will be able to prove their details without hesitation.

In closing, Clive encourages anyone interested in participating in an auction to ask questions, “Ask as many questions as you need to feel confident. Professional auctioneers who take pride in their craft will gladly assist you because they want to ensure that you have a pleasant auction experience.”