With the recent and sudden shift to online auctions, the auction industry itself is experiencing a keen interest from buyers who have no auction experience and just need a little more understanding to get them participating. Is this describing you? Then this Auction Basics series is for you, because auctions are governed by very specific rules and regulations and once you’ve mastered them, there’ll be no looking back.
But, let’s start at the beginning. Before you even think about registering for an auction, you need to understand these 3 things.
YOU have to do the homework.
Yes, the onus is on you to make sure you know what you’re buying. Whether it’s a house, a car or art, it’s up to you to find out everything you can about the item. You need to understand the fees associated (think commissions, interest), any outstanding payments you may need to settle, VAT or transfer duties, delivery or transport. Your highest bid must be less than all these costs combined or you’ll get yourself into trouble.
Gather as much information as you can, go to viewings, ask questions. A reputable auctioneer will give you access to as much information as they can. It should raise alarm bells if they skirt issues or deny viewings.
Buyer (that’s YOU) Beware
You’ve heard of “voetstoets” or “as is” this is a common term in all Auction Conditions of Sale. This is why doing your homework is so important, once you’ve bought it, its yours with all its flaws. You weren’t at the start of the auction were the auctioneer said that the engine wasn’t running or that there were tenants in the property or the painting is actually painted by the artists assistant? That’s your problem now. Make sure you know what you’re bidding on.
A Deal is A Deal
If you are the highest bidder, you’re buying that item. It’s in the Conditions of Sale as well. If you back out, you’ll lose the deposit you paid to bid at the auction. You could even be sued by the owner for any losses they incurred (you did basically deny them a sale to the person you outbid) So don’t bid unless you are serious about buying, don’t bid if you can’t afford it or haven’t arranged the finance. It also ruins your reputation, word gets around.
And that’s it, bid with your head not your heart, right from the beginning. If you approach auctions with a clear purpose, do the necessary research and understand your limits – you’re good to go. Look out next week for the low down on Sheriff Auctions.