BECOME
AN EXPERT AT PROPERTY AUCTIONS
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COMMERCIAL
PROPERTY AUCTIONS:
1. Two commercial
properties on auction
2. Introduction to
Commercial Property Auctions
3. Auction sale vs.
Ordinary sale
4. Pre-auction –
Doing it the right way
5. At the auction
6. Auction Etiquette
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X COMMERCIAL PROPERTIES
ON AUCTION |
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SOMERSET
WEST - 175 MAIN ROAD
Stunning office
building zoned Special
Business Zone.
Ideal for professional
offices
e.g. architect/legal/accountants/realty
etc.). High visibility
on corner Main Road and
Private Road. Prime position,
very good address and
excellent
branding or signage opportunities.
10 parking bays. Current
floor area is 198.5m²
= 18% coverage.
Coverage:
50%
Bulk factor:
1
Max. ht :
2 storeys
Erf size:
1100m²
GLA:
275.3m²
Auction
Date: Wed, 30
Jan 08
Time:
11h00
Place:
On site -175 Main Road,
Somerset West |
AUCTION
DETAILS:
Western Cape
30th January @
11am |
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BROKER
INFORMATION
Broker: Mark
Miles
Cell: +27 (0)
82 413 3882
Email: mark.miles@pamgolding.co.za |
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KUILSRIVER
- COMMERCIAL & RESIDENTIAL
DEVELOPMENT OPPORTUNITY
Large property comprising
two erven with exceptional exposure
to passing trade and high traffic
volumes. Plans in place for
townhouses, offices and 22 parking
bays. Currently being rezoned
to allow for further commercial
development. Sale includes house
with vacant occupation. Accessible
from van Riebeeck Road (front)
as well as 1st Avenue (back).
Combined erf size: 1995 sqm.
Auction
Date: Wed, 12 Dec 07
Time: 11h00
Place: On site
- 75 van Riebeeck Road (Main
Road), Kuilsriver |
AUCTION
DETAILS:
Western Cape
12th December @ 11am
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BROKER
INFORMATION
Broker: Solly Gild
Cell: +27 (0) 83 261
1213
Email: solly.gild@pamgolding.co.za
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| INTRODUCTION
TO COMMERCIAL PROPERTY AUCTIONS |
PAM
GOLDING COMMERCIAL AUCTIONS
QUICK FACTS:
Registration
fee:
Nil
Deposit:
5%
PGP % commission of
auction sale price:
10% - Unless there is a private
treaty sale prior to auction
in which the seller agrees
to pay the commission
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It
is safe to say that the past few
years have seen unequalled growth
in the auction industry. It is important
to remember that auctions are really
just another way to dispose of your
assets.
There
are, however, some false impressions
that still exist around auctions,
mostly that only people in financial
difficulty put their properties
on auction. This perception is incorrect.
More
and more private sellers are approaching
auctioneers directly to dispose
of their property as they realise
the benefits of selling through
an auction.
AUCTION
SALE VS. ORDINARY
SALE
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Auction
Sale |
Ordinary
Sale |
| Focus
is on your property
alone. |
| Auction
conducted in 3 to
4 weeks or tailored
to your requirements.
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| Exclusively
showcases throughout
the market place. |
| Buyers
act on your time
frame. |
| Auction
creates a sense
of urgency to promote
buyer interest. |
| Realises
the property's fair
market value. No
limit on upside
potential. |
| Eliminates
guesswork in determining
the asking price
of the property. |
| All
conditions of sale
set by seller in
advance, thus eliminating
negotiations. |
| Property
sold without unforeseen
events. |
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| Property
one of many being
advertised |
| May
remain on market
for months or years. |
| Minimal
advertising; heavy
reliance on Multiple
Listing Service. |
| Little
motivation for buyers;
you wait for them. |
| Price
reduction encouraged
creating buyer interest
and activity. |
| Upside
potential limited
by asking price. |
| Seller
risks overpricing,
and thus seeing
little interest,
or under pricing
and selling for
less than the property
is worth. |
| Seller
must negotiate all
aspects of sale. |
| Unforeseen
events are common. |
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Look
& Learn
Many properties with development
potential are sold at auction but
these auctions can be quite intimidating
for the amateur. If you are seriously
interested in buying a property
at auction, it is a good idea to
go to an auction as an observer
first before trying your hand at
bidding.
It is possible to buy a bargain
but it is also just as easy to make
a disastrous mistake.
Auction
Protocol
If you make an offer to buy a property
at auction, then that offer becomes
immediately binding. You will have
to exchange contracts immediately,
pay a 5% deposit on the day and
complete your purchase within the
stipulated time, usually twenty-eight
days.
If
you do not, you will lose your deposit,
be sued for breach of contract,
and be liable to pay the difference
between the price that you agreed
to pay for the property and the
amount for which it is subsequently
resold. Therefore, do not bid for
any property until you have completed
the necessary preparation.
| DOING
IT THE RIGHT WAY… Pre-Auction… |
1.
Do your Homework
Arrange
to view the property on auction. If
it is in need of renovation, take
your builder or surveyor along to
estimate the likely cost of work needed.
Never
buy a property that you have not seen,
however tempting the price. Some properties
are sold at auction for what appears
to be a fraction of their true value
and there is usually always a reason
for this.
2.
Arrange your Finances
Unless you have the cash in the bank,
you must have mortgage funds in place
before the auction day. This means
that you will have to apply for a
mortgage, pay the bank’s valuation
fee and have an offer of mortgage
in writing before the day of the sale.
The
5% deposit must be paid on the day
of the sale. Check with the auctioneers
on payment arrangements but most require
a banker's draft or similar.
3.
Instruct your Attorney
You will need a conveyancing attorney
lined up to check that there are no
legal implications with the property,
or maybe unfair terms in the contract
of sale.
4.
Decide on your Price… and stick
to it!
There are many instances of inexperienced
bidders getting carried away in the
heat of the moment and paying too
much for a property at auction. Decide
what you are prepared to bid and stick
to it.
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| At
the Auction… |
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On
the day of the auction,
arrive early. |
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Register
as a bidder at the start
of the sale. |
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Try
to avoid making the first
bid. If a property is
not popular, the auctioneer
may drop the opening bid.
You wouldn't want to pay
more than needed to. |
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Finally,
do not bid above your
agreed limit. |
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| Upside… |
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upside is that there are
some genuine bargains
at auctions. The dealers
will typically be looking
for a margin of 20% plus
financing costs. This
margin can be yours -
if you bid wisely. |
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| STEP-BY-STEP
ETIQUETTE AT PROPERTY AUCTIONS
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1.
When you register, request a copy
of the Conditions of Sale and read
them
2. Ask the auctioneer all appropriate
questions prior to the biding
3. Only ask questions at the designated
question time – make them relevant
4. Remember that auction sales are
non-suspensive and "voetstoots".
5. Watch, listen, ask and bid only
when you feel comfortable
6. Settle immediately after your successful
biding of property
Remember…
• Commission and taxes may be
payable over and above your bid price
• To make your financial arrangements
prior to the auction sale
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SOLE
AND EXCLUSIVE MANDATE-AUCTION
OR PRIVATE TREATY WITH RESERVE
-SALE OF IMMOVABLE PROPERTY |
Click
Here |
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AGREEMENT
OF SALE OF IMMOVABLE PROPERTY
AUCTION |
Click
Here |
If
you would like your commercial property
put on auction, please contact our
professional Pam Golding Properties
Auctioneer now. Contact
details:
Paddy Smuts
Auctioneer, Pam Golding Commercial
Auctions
Email: paddy.smuts@pamgolding.co.za
Cell: +27 (0) 82
415 7730
Office: +27 (0)
21 417 7878
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| A: |
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Actual
completion date
The date when completion takes
place or is treated as taking place for
the purposes of apportionment and calculating
interest.
Addendum
An amendment or addition to the
conditions whether contained in a supplement
to the catalogue. This may be a written
notice in the catalogue, or announced at
the auction.
Auction
A public sale in which property
or items of merchandise are sold to the
highest bidder.
Auctioneer
The person who conducts an auction.
The auctioneer introduces each lot offered
for sale, acknowledges bids, and announces
whether lots are sold or unsold and their
final bid prices. |
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| B: |
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Bid
The offer to buy property at a specific
price.
Bidder's Number
The unique number issued to each person
who registers at an auction.
Bid Ringing
The illegal practice whereby two or more
people agree not to bid against one another
so as to deflate value; also known as collusion,
and illegal under South African law.
Bidder's Pack
The package of information and instructions
pertaining to the property to be sold at
an auction event usually distributed to
prospective bidders. Sometimes called a
"buyer's pack" or a "due
diligence pack" |
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Caveat
Emptor
A Latin term - "let the buyer beware".
A legal maxim stating that the buyer takes
the risk regarding the quality or condition
of the property purchased, unless protected
by warranty.
Completion
On completion of the sale of the lot there
is usually a defined time period from the
auction to the completion date in which
the sale must be finalised. Penalties will
be applied if the sale is completed late
which can include losing your deposit.
Conditions of Sale
The legal terms that govern the conduct
of an auction, including acceptable methods
of payment, terms, buyer's premiums, possession,
reserves and any other limiting factors
of an auction. Usually included in published
advertisements or announced by the auctioneer
prior to the start of the auction. |
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Exchanging
contracts
If you are the successful bidder
at the auction sale, the sale is binding
on the fall of the hammer and you will then
be asked to sign and exchange contracts
in the auction room. |
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| G: |
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Guide
price
A guide price gives an indication of the
price that the property is expected to sell
for and what the vendor is hoping to achieve.
Guide prices are for information only and
shouldn’t be relied on as an indication
of reserve price, or representing professional
valuations for any purpose. |
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In
the room
A bid from someone in the room (not by phone.) |
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Lot
Each separate property described in the
catalogue or (as the case may be) the property
that the seller has agreed to sell and the
buyer to buy. |
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Previews
A viewing of the property held in advance
of the auction. Pre-auction viewings are
open to the public and may be attended at
no charge.
Private treaty
The sale of a property at a price agreed
by the seller and the buyer or their agents.
Proxy bid
The auctioneers can undertake bidding on
behalf of buyers unable to attend the auction
in person. The buyers must contact the auction
house prior to the auction to obtain an
official, proxy bidding form. This must
then be returned to the auction house with
a deposit cheque within the time specified
by the auctioneers. The buyer writes the
maximum amount they will bid to on the form
and the auctioneers will bid on behalf of
the buyer, up to, but not beyond, the stated
price. |
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| R: |
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Reserve
A reserve price is the lowest price the
vendor will accept. This is agreed between
the vendor and the Auctioneer. Most properties
entered into the auction have a reserve
price. This is confidential and not disclosed
to any interested parties. |
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Telephone
bid
A telephone bid, made by a member of staff
from the auction house. The staff member
telephones the client from the salesroom
to bid on particular lots and relays the
client's bids to the auctioneer during the
bidding on those lots.
Tenancies
Contracts to occupy or lease the property
subject to rent. A lot may be sold subject
to exisiting tenancy agreements. |
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Vendors
Roll
The document, which is used to record the
buyer's number and the price bid.
Voetstoots
Selling the property without warranties
as to the condition and/or the fitness of
the property for a particular use. Buyers
are solely responsible for examining and
judging the property for their own protection. |
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Withdrawal
Failure to reach the reserve price or insufficient
bidding. The auctioneer will withdraw the
property from the auction. |
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| Helping
you make vital decisions for your future
investments. |
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| Residential
development models and securing a stable
cash flow with commercial property. |
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| INTERNATIONAL
INVESTMENTS |
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| Live
twice in Perth, Australia... |
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| RESIDENTIAL
PROPERTIES ON SALE |
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