Acquiring property for sale on auction via an online platform is a convenient way of transacting, says MC du Toit, chief executive, property sales for BidX1 South Africa, which is in a joint venture with the Pam Golding Property group.
“It’s a lot easier and quicker than physically attending an auction at a specified location, plus it’s secure, and provides an opportunity to acquire a property at a value-for-money, market-related price,” says Du Toit.
“In many instances there is no buyer’s commission, or there is a reduced commission from that seen at normal auction sales. Bidders are advised to check the details of the property of interest to make sure what the commission and deposit structure are.”
Du Toit’s advice for online bidders: “Do your homework upfront and know what you can afford and are willing to pay for a property, as auction sales are non-suspensive.”
Misconceptions are that bidding aggressively will intimidate other bidders, or that dragging out an auction with low bids may cause other bidders to lose interest, “but neither of these is the case remain calm and do what you feel comfortable with”.
“In the current buyers’ market,” says Du Toit, “where stock is abundant but purchasers are in short supply, there is downward pressure on property prices, creating a situation which empowers buyers to negotiate strongly on price.
“The auction method of sale is highly efficient in these market conditions, as it creates a platform where buyers can freely negotiate at that specific time, up to the level that they feel comfortable with. The final price achieved may even exceed the seller’s expectation.”
MC du Toit, chief executive, property sales for BidX1 South Africa. Picture: BidX1 South Africa
BidX1 South Africa’s online auctions take place in real time, with the key benefit that you can bid for property from anywhere in the world, and from any computer or hand-held device.
Bidders have to register first and provide FICA documentation, namely ID and proof of residential address, as well as source of funds, thereby eliminating any fictitious bids.
“The process itself is transparent, as everyone can see the bidding as it unfolds. As the process is recorded, anyone is also able to view the bidding for properties sold via the previous online auctions,” says Du Toit.
He advises you familiarise yourself with the catalogue of properties on offer, and decide which are of interest. Here are some of his tips:
1. Before participating in an online auction, physically inspect the property at a show day, download and fully understand the conditions of sale and read all the relevant information regarding the specific property of interest.
Professional property brokers are also on hand who can answer any questions via telephone or email.
2. Once you’ve made the decision to bid, you need to register - and generally this is with payment of a fixed registration fee. Bidder registration usually opens a week before the auction and, while the registration process itself takes only about five minutes, it is advisable not to leave registration to the last moment.
3. Decide upfront how high you are prepared to bid in order to secure your desired property. If you don’t want to place your bids manually, you can set a maximum bid. The computer will then enter bids for you only as it becomes necessary to keep your position as the winning bidder and only up to the maximum bid price that you’ve specified. Your maximum bid cannot be viewed publicly, so only you will know how high you’re willing to bid. If you are the successful bidder, a deposit of 10 percent of the opening bid amount for the property is immediately payable.
4. All auction properties are sold without suspensive conditions, so if you are the successful bidder, a legal and binding contract has been formed and you are legally obliged to complete the sale. Consequently, you need to ensure you have the necessary finance available for the purchase, either by pre-qualification through a bank or with ready funds on hand. The guarantees are generally due around 30 to 45 days from date of acceptance of your offer, which leaves you with reasonable time to apply for finance. However, the sale is not subject to the purchaser obtaining finance or bond approval.
He adds the bidding opens on all lots at the same time on the day of the auction, and the opening time is clearly advertised across all lots. The closing time for each lot is different and is also indicated on the relevant lot page.
If a bid is placed within 60 seconds of the lot’s closing time, an additional 60 seconds will be added. This is known as an extension period, during which any further bid that is placed will result in the clock re-setting again for a further 60 seconds, giving all registered bidders a fair and equal opportunity to place another bid.
The next auction is scheduled for July 3. To receive the catalogue via email, potential buyers can register their details at bidx1.com/en/south-africa.
For further information, visit https://bidx1.com/en/news/buying-property-south-africa-bidx1s-digital-platform or email [email protected].