Joining the Exciting World of Sale by Auction

As the murmur of voices grew into an intense hum, the auctioneer’s voice cut through the assembled crowd, calling the bids as the auction rose in intensity.

The bustling crowd began to bid furiously, raising and counter-raising, sparking an electric atmosphere in the room as the auctioneer’s voice began to race…

Sale by auction is not only a fascinating event, often filled with drama and excitement, it is also fast becoming South Africa’s preferred method of sale for Real Estate. “In most developing countries, auctions have always been viewed as an up-market choice of disposing of valuable assets, including real estate. In the new millennium property boom, auctions in South Africa have started proving more and more popular with homeowners,’’ explains Alliance Group CEO, Rael Levitt. “Auctions allow a swift sale and a fantastic opportunity for serious buyers to find value.”

Alliance Group is a leader in the field, introducing the ‘Multiple Auction’ and now the ‘Jumbo Auction’ whereby over 100 residential properties are brought to the auction floor on a single day. This follows a popular trend in the US and UK whereby over 1000 properties are auctioned in one event over three days. Also new to the world of auctions is a trend from the USA whereby potential buyers can board a bus which will take them on a ‘tour’ of repossessed houses for viewings. In the USA, some companies are now even providing a luxury service whereby potential buyers board a luxury bus and enjoy canapés and champagne while viewing properties.

But how does one go about participating in an auction? It really is not difficult, as this introduction will explain.


It is vital to gather information about the upcoming auctions. Alliance Group has a very informative website at which lists upcoming auctions, or you can call 0861 ALLIANCE. It’s important to research and review the relevant property(ies) you are interested in. The cornerstone to this is the bidder’s pack which will list the specific conditions of sale and any other specific legal documents that may need to be reviewed. This is available from the auctioneer.

Now you should view the property, and while doing so, ask as many questions as possible. If you like what you see, you can also pre-register for the auction when viewing the property. Because a refundable deposit is payable at auction, you also now need to prepare your finances. Also remember that, if you are not able to be there on the date, proxy or telephone bidding is an option and each Alliance Group auction has a designated area for such bidding. Make sure you understand all terms and conditions of the sale.


On the day of the auction, make sure you bring your ID and refundable bidder’s deposit to the auction. If you have not pre-registered, you can register at the auction and pay the refundable deposit (R10,000 at a residential auction, R25,000 at a commercial real estate auction) to receive your bidder’s card. Also note possible amendments to the Conditions of Sale – these will be announced by the auctioneer. Q&A sessions can only take place before the bidding begins, not during it, but auctioneer’s assistants are available for specific enquiries.

Ask, watch, listen and bid only when you feel comfortable to do so. Alliance Group auctions are recorded and audited in order to avoid confusion and disputes. Once you are in the swing of it, it’s really easy, and if you’ve done your homework, you should feel very comfortable. Don’t be intimidated by other bidders – work at your own rhythm – and know your limits so that you don’t get caught in a bidding war.

You can obtain a bond for a property purchased at an auction. However, auctions are non-suspensive transactions and as such your offer at an auction sale is NOT subject to you obtaining a bond. Remember that bids are legally binding and cannot be retracted after the fact. Also remember that you will have to add auctioneer’s commission and VAT on that commission to the bid price. At auctions, properties are sold “voetstoots” (in the condition you see them) – so do your homework.

So you’ve done it! Now what?

On conclusion of a successful bid, you’ll sign the conditions of sale and may need to pay a 5% deposit of sale price, in addition to the auctioneer’s commission. In most cases, once the contract is signed and payment arranged, you will be contacted by the seller’s attorney with regard to the transfer procedure.

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