Sheriff auctions in South Africa can be a goldmine for the savvy investor. These auctions, often resulting from court orders to recover debts, offer properties at competitive prices. If you’re looking to expand your portfolio, understanding the ins and outs of these auctions can give you a significant advantage.
Understanding Sheriff Auctions:
Differentiate between ‘Sale in Execution’ and ‘Property in Possession’. Recognize the role of the sheriff in these auctions.
Pre-Auction Strategy:
Due Diligence: Conduct a comprehensive check on the property’s legal standing, including any encumbrances or liens.
Inspection: Visit the property, preferably with a qualified inspector, to assess its condition and valuation.
Budgeting: Determine your maximum bid, including additional costs like auctioneer’s fees, arrears, and transfer duties.
Financing:
Pre-approval: Ensure your finances are in order, with pre-approval for a loan if necessary.
Cash Reserves: Have immediate access to the required deposit, often 10% of the property’s value.
On Auction Day:
Arrival: Get there early to get a sense of the competition and finalize any outstanding paperwork.
Bidding: Keep a cool head, stick to your budget, and be prepared to walk away if the price goes beyond your limit.
Post-Auction Steps:
Winning the Bid: Understand the immediate financial obligations if you win.
Transfer Process: Engage a conveyancing attorney to handle the legal transfer and registration of the property.
While there are great deals to be had, sheriff auctions also carry risks. A clear strategy, thorough preparation, and disciplined bidding are the keys to making profitable investments at sheriff auctions in South Africa.