Ask Lots Of Questions
Find out everything you can about the property. What is the condition of the property? How much will it cost to get it up to standard again. What area is it in? Sometimes you won’t have access to enter the property for an inspection? Are you comfortable with buying that particular property sight unseen?
Are there are tenants with a lease and what is the length of the lease? (Tenants cannot be evicted just because the property has changed ownership). Is there a possibility that the previous owners must be evicted?
In most cases you will be required to settle any outstanding amounts before you take possession of the property. You’ll want to subtract these amounts from your final bid. So make sure you know how much is owed to:
- Rates and taxes
- Homeowners Association
- Body Corporate
Bid With Your Head Not Your Heart
Once you’ve thoroughly researched the property, set your highest bid amount (including the auctioneer commission and VAT) and stick to it. Don’t get caught up in the competition – its not worth it. Your bid is a binding offer and if you retract it you will lose your deposit (which is usually quite substantial)
Make sure you have arranged your financials prior to the auction. You’ll need to immediately pay 10% of the hammer price to secure your bid.
Confirm The Type of Auction
Sheriff Auctions have their own rules, regulations and confirmation times and each property is treated as an individual case. Sometimes a judge sets a reserve, sometimes the property is sold for whatever price the auctioneer can get on the day. Sometimes the highest bid has to be confirmed by the judge first. Or the property you’re interested in is withdrawn last minute. Sales can be confirmed quickly or they can take a very long time for the sale to be concluded in court. Are you prepared for these kinds of delays on transfer, knowing your deposit will be tied up until then?
Sheriff Auctions don’t come without risks for buyers, but the rewards can be big if you play it smart. If you’re interested in participating in Sheriff Auctions or just want to watch a few before you decide, you’ll find some online sheriff auction listsed here.