Auction Glossary

A prospective buyer's indication or offer of a price he/she will pay to purchase the property at auction. Bids are usually in standardised increments established by the auctioneer.

 

"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".

 

"Buyers Commission"

An advertised percentage of the high bid, or potentially a flat fee , added to the highest bid to determine the total contract price to be paid by the buyer. Also known as "Purchaser's Commission".

 

"Caveat Emptor"

A Latin term meaning "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.

 

"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.

 

"Electrical Installation Regulation"

An Electrical Compliance Certificate is required by any purchaser of a fixed property in South Africa. Usually must be provided for by the purchaser, at his/her cost, at an auction sale.

 

"Estate Agency Affairs Act (EAAA)"

Auctioneers who sell immovable property fall within the legal definition of an Estate Agent (as established by the EEA 112 of 1976) and must therefore be registered with a valid Fidelity Fund certificate .

 

"Occupational Interest"

The amount which the purchaser of a fixed property pays prior to registration of transfer, and after taking possession. This is normally a fixed amount and a percentage of the purchase price.

 

"Reserve Price"

The minimum price that a seller is willing to accept for a property to be sold at auction. Very few South African auctions have reserves.

 

"Subject to confirmation"

A sale which is subject to the seller's approval within a specified time period.

 

"Take one - take all"

A method of sale whereby the successful high bidder wins the right to choose a lot or lots from a grouping of similar or like-kind lots. After the high bidder's selection, the lot is deleted from the group, and the second round of bidding commences, with the high bidder in round two choosing a lot, which is then deleted from the group and so on, until all lots are sold. The winning bidders have the right to choose the number of lots he wants.

 

"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.