A Guide to Auctions
Have you ever wondered what an auction is and how it works? At SA Auction, we want you to join in the excitement.
What is an auction?
An auction is the sale of goods to a buyer who has won a bid against other potential buyers for the item being sold. An auction occurs during a specified time period at a venue or online.
What is the difference between an auction and a sale?
During an auction potential bidders place bids toward an item, and the bidders determine the price value of the item. The item is sold to the highest bidder. During a sale, the price value of the item is determined by the seller, and the buyer simply pays the amount specified by the seller in order to purchase the item from them.
What is a Lot?
Many items can be sold at an auction. For this reason, items are grouped into Lots, either as single items or as a group of items that form a unit, so that they can be easily identified. Each Lot is allocated a number.
What is a minimum bid?
A minimum bid is the minimum bid amount that will be accepted by the auctioneer for a specific Lot, and normally the amount on which the auction will start.
What is a bid increment?
This is the minimum amount with which the bids will increase every time a new bidder places his bid.
What is “fall of the hammer”?
At any auction you are likely to hear a version of this term. Traditionally, a hammer was struck by an auctioneer to indicate that a bidder has won the bid and that the sale is final (no more bids are accepted). Nowadays, although there may not be a hammer (or gavel), the meaning remains the same, that is: the auction has ended and no more bids are accepted. When the hammer falls, the winning bidder is bound by the terms and conditions that were set by the auction house or seller.
What is “Rouwkoop”?
This refers to money paid by the bidder as a deposit and/or the auctioneer’s commission, which will be forfeited by the bidder if the bidder later defaults on the sale agreement.
What does “Voetstoots” mean?
A term that describes the sale of an item exactly “as is” or with all its faults, and where the seller has no legal responsibility for its condition.
How does the progression of a live ONLINE together with an ONSITE auction work?
Traditionally there is an air of excitement surrounding an auction at a venue in which buyers compete to determine the price of an item being sold. The auction method has been around for centuries, and it continues to thrive because it is one of the fairest and most transparent ways to conduct a sale
One of the huge benefits to online bidding is being able to keep up with your work – whether you’re in the construction field or have an office and clients to attend to. If you’re looking for a fun day off, while still being productive with upkeep on your equipment, a visit to an auction is an exciting and beneficial option. However, if the day is just too important to miss, you can always bid live online from your computer or phone!
A Live Online together with an Onsite Auction is a combination of a Live and Internet Auction.
- You can bid live at the venue, or you can bid live from your computer or cellphone at home or work.
- An online Key Account Officer will relay online bids to the Auctioneer at site, and online bidders will bid against floor bidders who are at the auction, as well as other online bidders.
- Typically, you can bid via computer two ways. You can place an “auto-bid” or you can bid live over the computer in real time. By placing your auto-bid, the system will automatically place bid increments for you, in pre-determined amounts. This will increase your bid if your original bid is out bid by another bidder, whether it be an online bidder or an onsite bidder. This accelerates the auction process, and assists you with your bidding. If another bidder bids higher than your auto-bid, the system will stop increasing your bids, and you will have to increase your auto-bid amount in order to continue competitive bidding.
- The Auction will be set to “live” at the time of the auction on the auction date. The auctioneer will start by reading all the terms and conditions to the bidders at the venue, and explain the auction.
- Once the item starts, you will be able to follow the bidding in real time.
- The lot will reflect what the current bid amount is on the item.
- For example, if the current starting bid is R50 the Auctioneer will ask for the next bid increment. If he asks for R60 and if you are willing to pay R60 you would click bid. The KAO would relay your online bid to the Auctioneer. He will then relay this bid to the floor bidders, and ask for R70. If a floor bidder accepts the R70, the KAO will update the bid to notify other online bidders the current bid amount on the floor is R70.
- Your computer will show that you have the highest bid until another bidder bids.
- When a person on the floor bids R70, the KAO your computer will show that you are no longer the highest bidder.
- It will ask if you would like to bid again at R80.
- This process will continue until there is no further competitive bidding.
When there is no more active bidding either online or onsite, you will be given an additional amount or predetermined time to place another competing bid, which will be displayed on your screen, just as you would at an auction in person (this is where the auctioneer tells the floor bidders: Going once, going twice, Sold to…). This allows all participants online to have an equal and fair chance of competitive bidding, just as they would at an auction taking place in person.
Here are some helpful tips:
- Understand all terms and conditions including the deposit amount and the methods of payment.
- Information available on buyer’s guide and/or the catalogue on our website.
- Familiarise yourself with all the lots on the auction, before you decide what you are interested in.
- Make sure you know what you are buying.
- Do not wait until the last minute to register, you might lose out.
- First things first, be sure to read the conditions of sale. There are a number of conditions under which you bid such as VAT and commission protocol.
- Make sure that the auctioneer sees and acknowledges your bid.
- Once the item is knocked down on you, the sale cannot be cancelled.
- No purchases can be removed during the auction.
- You must have the money available before hand. Should you require financing, obtain prior to auction (refer to conditions of sale).
- Take note: bidding prices do not include VAT or any documentation fees (refer to charges).
- Usually a deposit fee is charged at every auction. Check the deposit amount at the registration office or on our website.
- Registered vehicles carry a documentation fee.
- A 2% cash deposit fee is charged.
- VAT is charged to all knocked down prices.
- Buyers commission plus VAT is also charged on top of knocked down prices.
- Our registration desk will refund your deposit if you made no purchase(s). Allow for a reasonable time for funds to be made available.
- When a purchase was made, you will receive a proforma invoice for payment.
- Payments may be received in any of the following:
- Bank Guaranteed Cheques
- Electronic Funds transfer (EFT)
- Cash (2% cash handling fee payable on cash deposits)
- No item will be released, unless full payment is reflecting in our bank account.
- You need to contact our admin office on 079 339 5915 or firstname.lastname@example.org to arrange for the release note.
- Prior to collection you need to provide our admin office with the name and ID number of person that will be collecting.
- Upon receiving information required as per point 3, a release note will then be provided to the buyer and seller accordingly.
- Collection will be strictly by appointment and during office hours from: Monday – Friday.
- SA Group and its affiliates will not be responsible for any losses incurred due to above process not followed or any other circumstances beyond our control.