Whether you are looking for a different home, car or a piece of artwork, auctions have something for everyone. Many people seem to be a bit sceptical about buying items such as cars at auctions; this scepticism could be the result of a lack of understanding of the processes involved at an auction.
If you are new to the auction game, you have landed on the right page. To help you through your auction experience, we have put together a list of auction terms that may baffle the first time auction attendee. We have explained these terms to get you started.
Let’s take a look at a few important auctions terms.
Auction: An auction is a public platform used to sell and buy used assets. Assets are sold to the individual who makes the highest bid.
Bid: As a prospective buyer, you make an offer on an item; this is known as the bid. You raise your hand to signal the amount you would like to pay for the item.
Commission: This is usually paid to the auctioneer after a sale has been made. It is usually paid by the buyer.
Conditions of Sale: In order for you to get the most out of the auction experience, you must familiarise yourself with the conditions under which an asset is sold at an auction.
Deposit: There are two deposits that buyers have to pay: A registration deposit which will be refunded if you do not make the highest bid; the second deposit is payable when you make the highest bid, you pay a percentage of the purchase price of the item.
Fall of the hammer: Once the hammer falls, it means that no more bids will be accepted and that the sale goes to the highest bidder.
Gearing: If you are to purchase a home or a vehicle at an auction, you need to make sure that you have the finances. Gearing is the process of getting a loan from the bank to finance the asset you purchase at an auction.
Lot number: This is the number that you see on an item that is about to be sold at the auction.
Properties in Possession (PiPs): These are properties that have been repossessed by the bank due to owners defaulting on payment.
Proxy: If you are unable to attend the auction, a proxy may bid on your behalf.
Reserve price: This is the minimum price for an item. If the bids are lower than the reserve price, the seller does not have to go through with the sale.
Rouwkoop: This is money paid such as the deposit or commission. This money will be forfeited if you, as the buyer, don’t adhere to the terms of the sale agreement.
Surety: This is to ensure that the buyer of an item is protected should the terms of the sale agreement not be met.
Title deed: This is a legal document that proves the ownership of property.
Voetstoots: Items sold at an auction are described as voetstoots because they are sold “as is”; this means that the seller has no legal responsibility for the condition of the item when it is sold.
Now that you are familiar with auction terminology, you are ready to attend your first auction. Park Village Auctions hosts property and vehicle auctions. We also offer online auctions so you can bid from the comfort of your home.
For information on our auctions, visit our website today.