A home you can buy for nothing goes on sale this week

Of all the homes in South Africa going to auction this week, only one doesn’t have a reserve price.

This home in a middle-income suburb has no asking price.

Buyers could get the bargain of a lifetime: a home below R1 000.

But there are conditions.

A home you could buy for free

This week, a home in Welkom makes its way to a sheriff’s auction. The home doesn’t have a price.

Instead, bidders decide how much they’re willing to pay.

The sheriff has to accept the highest bid, regardless of the amount.

Of course, when the final hammer falls, the bidder will be responsible for paying the sheriff’s commission and settling the balance.

The auction will take place at the Welkom Sheriff’s Office: 366 Stateway, Doorn, Welkom, Free State, on Wednesday 26 November at 11:00.

The home going under the hammer is a 3-bedroom, 1-bathroom property with a garage on Van Wyk Louw Street in Jan Cilliers Park.

It’s a suburb where homes start at R650 000, and the average sale price is R1.1 million.

But this property is sold as-is, and buyers cannot inspect it before bidding.

The downside of buying at auction

Auction properties are routinely damaged by former occupants, and when the property isn’t vacant, buyers will have to spend money evicting the residents.

The buyer is also responsible for paying any municipal debt.

The home going to auction this week has R332 763 in municipal debt.

What is a no-reserve auction and what will you pay?

Before a bank can take a property to auction, it approaches the court.

In court, a judge sets a reserve price.

The reserve price is the lowest bid needed for a transfer of ownership.

To take possession of the home, a buyer must bid more than that price; otherwise, the bank becomes the owner.

But a no-reserve auction means there’s no minimum.

In theory, a bidder could bid R1 000.

If no one places a higher bid, they become the owner.

Because property owners can still owe the bank money after their home sells at auction, courts often place a reserve price, even if it’s R50 000.