Everything you need to know about online auctions

Posted on Oct 22, 2021

Online Auctions in South Africa

As we all know, consumer behaviour is changing in our country. Everything is moving online. And so are auctions!

What is an online auction?

An online auction is an online marketplace where people auction and bid on the assets that are being offered by the auction site. This happens on an internet-based platform. The auction times get determined beforehand and the duration is usually 24-48 hours.

Prospective buyers bid online from anywhere they have an internet connection. Buyers still bid against each other. The internet-based system handles the entire bidding process (instead of an auctioneer).

Bidding happens in real-time which allows for complete transparency. The seller can log in at any time to watch the auction. The highest bidder wins at the closing time.

Image represneting an online auction

Other benefits of online auctions in South Africa include

  • Saves time because you don’t have to travel, which makes it very convenient.
  • Online auctions could be less stressful because it is not so fast-paced. You don’t have to make a decision in a matter of seconds like you have to during in-person auctions. More people might be willing to take part because it is less overwhelming.
  • All bidders stay anonymous. This eliminates possible cartels and allows for more bidders as it's less intimidating. You can only see the other bidder's registration numbers and the identity of the bidders are not displayed.
  • Online auctions allow for longer bidding. The bidding process lasts 24 - 48 hours. Which is much longer than traditional auctions. This allows you more time to increase your bids.
  • You can market to anyone around the world, which increases the number of bidders. With online auctions, you are not limited and can include bidders outside of South Africa.
  • Reserved minimum prices. The seller decides on the minimum opening bid amount and the system will reject lower bids. But should no bidders bid higher than the minimum, the seller can reduce the reserve price.
  • Saves costs. Travel cost, parking cost, on-site staff, and venue hire in some cases will not be relevant. Saving you money.
  • You can market to anyone around the world, which increases the number of bidders. With online auctions, you are not limited and can include bidders outside of South Africa.

Woman making a final bid on her phone

How does an online auction work

Each online auction has its own specific rules and requirements. With Van’s Auctioneers, the process looks more or less as follows.

For the seller

Should you decide to auction your property, the auction house will contact you. The process will be explained to you, and an auction proposal prepared. The costs will depend on the property in question and each auction is unique.

The seller must supply documentation relevant to the sale. Such as title deeds, descriptions, high-quality photos, etc.

The seller decides on a minimum price he/she will accept, and the auction date is set. The assets are usually not sold on the fall of the hammer, and acceptance of the highest bid is at the seller’s discretion.

The auction house will be in direct contact with potential bidders.

For the buyer

You will also receive a booklet containing information on the auction. This includes opening and closing dates and times; auction conditions; property details; and auctioneer contact information. Check out an example here.

When registering, the interested bidder must submit FICA documents. The registration fee and the deposit is payable with EFT. Deposit amounts differ depending on the property on auction. The registration fee is refundable if you are not the highest bidder, and credited against the deposit if you are the highest bidder.

The Auction

Once bidding opens, bidders can start their bids. These are visible to all participants but they will only see registration numbers.

Should you not buy the property, you will receive the registration fee back into your account. If you win the bid, the auction consultant will be in direct contact to finalise all documentation.

If the seller accepts the offer, the property is sold and the normal process of transfer then follows.

Want to find out more and receive alerts for our upcoming online auctions? Fill in your details in the contact form below and we’ll get you started with Van’s Auctioneers!

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