Property auctions are a way for properties to be sold to the highest bidder through competitive bidding. In Zimbabwe, particularly in Harare, these auctions are commonly conducted by the Sheriff of the High Court and other private players like the ABC Auctions and Hammer & Tongues Online Auction amongst many other. They often occur when properties are sold due to bank foreclosures or disputes between parties, with the Ralyton Sports Club being a popular venue for these events.
While experienced real estate investors frequently participate in these auctions, first-time buyers are also welcome to join in the bidding. This article will guide you through the basics of property auctions, helping you decide if this could be a good option for finding a bargain, whether for living in the property or investing for resale.
The most common type of auction is the Reserve Auction, which is subject to confirmation. In this scenario, the highest bid is considered an offer rather than a guaranteed sale. The seller has the right to accept or reject this bid within a specified timeframe, which can range from immediately after the auction up to 72 hours later. Once accepted, the sale confirmation typically occurs within about 14 working days.
During this period, the original owner or any interested party can challenge the sale, which will then be reviewed by the Sheriff of the High Court. If necessary, the case can be escalated to a higher court, making it wise to seek legal advice.
To participate effectively in property auctions, it’s crucial to do your research. Understand the auction conditions and seek independent advice from a real estate attorney or a knowledgeable real estate agent.
If possible, visit the property to assess its condition from the outside, keeping in mind that many homes in foreclosure may still be occupied, so be respectful and avoid trespassing. It’s also essential to arrange your financing beforehand, as auctions typically accept cash and bank transfers. While all-cash buyers have an advantage, you can also finance your purchase through a pre-approved loan, but you must have the required security deposit in cash or transfer ready before the auction.
Confirming auction details is important, as properties can sometimes be stopped or cancelled for various reasons. You can register to bid up to seven days before the auction or on the day itself, which involves depositing a security amount and obtaining a bidder's card. Arriving at least an hour early allows you to complete registration and verify compliance with payment of the security deposit. The auctioneer will explain the conditions of sale and provide details about each property before starting the bidding.
Buying property at auction can be a unique investment opportunity, offering several advantages alongside some risks, such as limited property inspections and potential hidden costs. However, the chance to acquire a property at a significantly reduced price is appealing for many investors, whether they are looking for short-term gains or long-term investments.
By following the steps outlined in this article, you’ll be well on your way to securing a valuable property.
Disclaimer: This article reflects the author's personal views and should not be taken as investment advice. Prospective buyers are encouraged to consult legal practitioners or real estate agents for guidance.
