Buying on Auction
Whether you are looking to buy a car or property on auction, the general process is the same.
In order to buy on auction the following conditions apply:
- Pre-Registrations needs to occur before the auction begins. For this the buyer needs to fill out the registrations forms and deliver your FICA documents to the auctioneer. FICA Documents are your proof of address and a copy of your ID book. Should you be buying for a company, you will need a letter of authority.
- Payment of the registration deposit. This amount depends on the auctioneer and type of auction. This is refunded within 48hours of the auction if you are not a successful bidder. If you are a successful bidder, this deposit amount will be deducted from the invoice.
- The buyer is usually responsible for the auctioneer’s commission. This is in addition to the final hammer price. Remember the hammer price does not include vat or the commission.
Before the auction
- Study the catalogue and decide which lots you are interested in. Then contact the auctioneer and set up an arrangement to view. Auctioneers should also have bidder packs and more information on their units up for auction.
- Don’t rely on the guide price given to you by the auctioneer. Chat to estate agents and builders for properties and mechanics for vehicles anc machinery. This will give you a realistic price for when you go to the auction.
- If you have never taken part in an auction, go and watch an auction or two so that you can get the hang of how auctions run.
2. Scrutinise the bidder pack
- Auctioneers will often give you a bidder pack for properties you’re interested in – this includes the title deeds, local authority and environmental searches, fixtures-and-fittings list and a seller’s information form, plus any relevant leasehold information.
- For vehicles and plant & machinery, you are able to ask for condition reports as well as service reports.
3. Organise your finances
- If you need a mortgage or a bank loan in order to purchase the lot you are interested in, sort this out before the auction. Therefore you need to get a pre-approved loan for the highest amount you are willing to spend. Don’t forget to take the commission and VAT into account.
- As the hammer falls you’ll have to pay 10% then you’ll only have a month to pay the remaining 90% for property. If you are unable to get the final 90%, you will forfeit your 10% deposit.
On the day of the auction
1. Keep calm
- Some people find auctions exciting, others find them frightening. You will need to keep calm on the day.
- Make sure you know the highest price you are willing to offer and do not go above that.
2. Get there early
- Make sure you get a spot where you’re comfortable and the auctioneer will be able to see you.
3. If your interest lot does not reach reseve.
- If the lot does not reach the reserve price, the seller usually goes back to the highest bidder once the auction is over to discus and negotiate. Theefore hang around after the auction should your lot not reach reserve.