The ins and outs of bidding

THOROUGH: VALUABLE INFORMATION YOU NEED TO PARTAKE AT YOUR NEXT AUCTION

Pieter Geldenhuys, CEO of Bidders Choice breaks it all down for eager punters.

While selling goods on auction is one of the oldest forms of trade, people know very little and are unsure about this easy and fast way of selling.

Pieter Geldenhuys, CEO of national auctioneering group, Bidders Choice, says auctions are a great platform for buying and selling goods, but people are reluctant to sell and buy on auction because they are unsure of how the bidding process works, how much it costs and how consumers are protected. An auction is a result-driven, transparent process, he says. Geldenhuys will advise consumers on using auctions in a consumer series of three parts.

SELLING ON AUCTION There are different types of sellers:

Private: Individual consumers can sell goods such as cars at an auction.

Deceased: Executors and administrators of deceased estates prefer to sell assets on auction because it is an effective way of disposing of estate assets.

Deceased estate auctions attract a lot of interest as buyers know goods offered must be sold.

Salvage auctions: These auctions take place when vehicles, such as earth-moving machinery, used trucks and other vehicles are damaged in an accident, stolen or weather-damaged and repairs will cost more than the vehicle is worth.

In these cases, the insurance company will take over owner- ship and sell it on auction. Remember! Goods are sold as they are and cannot be returned, as the auction service does not assume any liability for any defects.

Buyers must, therefore, bid carefully and inspect items before the auction starts.

INTERESTED IN BUYING AT AN AUCTION? What you should know when buying on auction

Selling or buying goods on auction can be overwhelming when consumers are unfamiliar with this way of trade.

But Geldenhuys says once you are familiar with the processes of how the auction process works, anyone can use it.

Firstly, it is important to get an information pack from the auctioneer, which contains all the necessary information about the auction.

Study the information pack and make notes to prepare for the auction. Also, ensure you meet the conditions to register to bid at the auction.

The information pack should include the rules of the auction, any costs, as well as VAT and commissions, which must be paid. If it is not specified, ask the auctioneer before the auction starts.

Secondly, never bid on an auction if you are uncertain of the terms and conditions and the amount you must pay on the fall of the hammer, or, in the case of property, before transfer.

Deposits

A refundable registration deposit is required at all auctions. The amount you have to pay for registration will be advertised before the auction and depends on the value of the goods on sale.

If you are not required to pay the full amount on the fall of the hammer, you can be required to pay a 5-to-10% deposit and submit guarantees for the balance within 30-to-45 days. Remember! If you are buying property, remember that you cannot bid at an auction subject to getting bond finance. But auctioneers can refer you to a bond originator or bank for finance.

Auctions – what you should know

After preparing for the auction, you should also be prepared for the bidding process and issues such as hidden costs and final payments.

Geldenhuys says the process is very simple, providing you know how much you want to spend.

The bidding process

Any auction in South Africa works “by the rise”, which means the auctioneer has the sole right to regulate the bidding procedure.

The auctioneer announces the bid increments and will also call for bids.

You have to make sure what the maximum price is that you will offer before the auction starts. Never you maximum price and never be carried away with the ‘hype’ of the auction.

In some instances the sale of properties or goods are subject to confirmation, which means that the seller will confirm or reject your offer within one hour to 21 days after the auction.

Hidden costs

The auctioneer must announce any other hidden or extra costs before the auction.

Final payment

Final payments are due immediately when signing the conditions of sale, after the fall of the hammer. Remember! Stick to your maximum price to ensure you do not spend more than you can afford.