Auctioned properties can be a lucrative way to acquire an asset under your name. The prices are usually way lower below market value and can be a steal at times. However, nothing comes risk free and you should be aware of the pitfalls you could be stumbling onto when purchasing an auctioned property. Let’s take a look at some of the things involved.
You must be at least 18 years of age to be eligible to bid at a property auction.
You may register prior to the auction sale or on the auction day. You need a cashier’s order or bank draft equivalent to 5% (Loan Agreement Cum Assignment-LACA) auction or 10% (Non-LACA auction) of the reserve price of the property that you wish to bid for. You should arrive 30 minutes before an auction if you intend to register on the auction day.
After registration you can bid for the property you wish to purchase. Don’t be rash and bid more than the initial limit you have set.
The successful bidder will have to sign a Sales Contract and pay the first 5% or 10% of the final bid price, and settle the remaining balance within a certain period of time (common time frame is 3 months).
In most cases the amount will be greater than the deposit based on the reserve price, so bring along your cheque book and be prepared to fork out more.