Real estate auctions can be an exhilarating way to acquire property, but they come with their own set of
rules. Whether you’re a first-time buyer or a investor, understanding the ins and outs of real estate
auctions is essential to make informed decisions and secure your dream property.

Here’s everything you need to know.

Before You Bid

1. Buyer Registration: The first step is to ensure you are registered as a buyer with the auctioneer.
Registration typically involves providing personal information and agreeing to the auction terms
and conditions.

2. Bidding Number: Upon registration, you will receive a unique bidding number. This number is
your key to participating in the auction, so make sure you have it ready before the auction

3. Financial Preparation: To bid with confidence, make sure you have the necessary funds
available. This includes the deposit, auction commission, and 15% VAT of the purchase price.
Without these funds, you won’t be able to secure your winning bid.

4. Confirmation Period: Be aware that most real estate auctions have a confirmation period. This
means that even if you win the bid, the seller can still decide not to proceed with the purchase
within a specified timeframe.

5. Additional Costs: Beyond the winning bid, you may be liable to pay transfer fees or additional
VAT. These costs can significantly impact your overall expenditure, so be sure to factor them
into your budget.

6. Ask Questions: Don’t hesitate to ask the auctioneer or their team for advice or clarification on
any aspect of the auction process. Understanding the conditions of sale and the property you’re
interested in is crucial.

7. Legal Obligation: Remember that when you place a bid at an auction, you are legally bound by
that bid. It’s a commitment to buy the property at the price you offer, so bid carefully and within
your budget.

What Not To Do At An Auction

1. Bid Without Proper Financing: Only bid if you have the financial means to make the purchase or
have made adequate financial arrangements. Unfulfilled bids can lead to legal and financial

2. Unregistered Bidding: Never bid if you are not registered as a buyer. Registration is a
fundamental requirement for participation.

3. Inadequate Understanding: Don’t bid if you’re not fully acquainted with or don’t understand all
the conditions of sale, including any special terms related to the property. Ignorance can lead to
costly mistakes.

4. Intimidation: Auctions can get competitive, and other bidders may try to put you off bidding.
Stay focused and don’t be intimidated by the actions or tactics of others.

5. Failure to Ask Questions: If you have doubts or need clarification, don’t be shy to ask questions.
It’s better to seek clarity beforehand than to make a costly error.

6. Hesitation: When bidding starts, be prepared to act decisively. Hesitation or procrastination can
result in losing the property you desire.

7. Loss of Bidders Card: Your bidding card is your ticket to participate in the auction. If you lose it,
report it immediately to the auctioneer, so they can issue a replacement.

Need to Know: Hammer Price and Buyer’s Premium

Understanding the terminology used in real estate auctions is essential. The hammer price refers to the
‘winning bid,’ the amount at which the property is sold. However, it’s important to note that this is not
the final amount you’ll pay. After the hammer price, a ‘buyer’s premium’ is added, which contributes to
your final total payment. Be sure to factor in the buyer’s premium when budgeting for your purchase.

4 Steps to Start Bidding

To participate in a real estate auction, follow these four essential steps:

Step 1: Create a Registration Request
Initiate the process by creating a registration request with the auctioneer. This typically involves
providing your personal information.

Step 2: Complete the Registration Process
Once your registration request is accepted, complete the registration process by providing any
necessary documents and agreeing to the auction’s terms and conditions.

Step 3: Register for Each Auction
For each specific auction you wish to participate in, ensure that you’re registered and submit any
updated FICA (Financial Intelligence Centre Act) documents as required.

Step 4: Pay the Auction Deposit
Before you can bid, you’ll need to pay the auction deposit, which is payable for each auction. Once the
proof of payment has been received, you’ll be issued a bidding card, granting you the ability to
participate in the auction.

Armed with this knowledge, buyers can approach real estate auctions with confidence, ensuring that
they are well-prepared to make informed decisions and potentially secure their dream property.
Remember, in the fast-paced world of auctions, knowledge is your most valuable asset.

Get in contact BRITE-X today.