As South Africa’s economy is slowing down and a recession is looming, the auctions of homes will become more frequent, and a great way to find your dream home.  However, there are some pitfalls to be weary of.

An auction is a public sale in which property are sold to the highest bidder. These sales are usually done by the sheriff of the court, but there are many popular auction houses, that attend to private auctions. Banks use auctions as the final step in their debt collection process and here homes of distressed owners can be bought at a reasonable price.

Buyers should however take notice that property sold on auction is sold voetstoots and it is therefore important that the buyer should know the following, before making the bid:

1. Inspect the property if possible.
2. Listen to the conditions of the sale when the sheriff reads it out before the auction
3. Check if the property is currently being leased and ask about the terms of the lease agreement.
4. The amount of the deposit that is due and payable on the day of the auction
5. How many days do you have to furnish the guarantees to the attorneys of the seller
6. The buyer is usually liable to pay the auctioneer’s commission as well as outstanding rates and taxes and levies. Ask what these amounts will be, so that you are not overindebted
7. If the buyer does not perform in terms of the terms and conditions, the seller / bank will have the right to cancel.Make sure that you can comply with all the terms and conditions, as you might lose your deposit and all payments already made.

Happy auctioning!