Buying a repossessed property in South Africa

Sheriff sale, bank sale or levy sale?

Not every distressed sale is a bank repossession, and the three work differently.

A sheriff sale in execution is a court-ordered auction. After the High Court grants judgment and a Rule 46A order, the local sheriff sells the property to the highest bidder, subject to a reserve the court sets. It is advertised in the Government Gazette before the auction date, which is where every RepoLens listing comes from.

A bank-repossessed sale is different. There the bank already owns the property — usually because it was the only bidder at an earlier sheriff sale — and sells it privately rather than at auction. Those are listed on bank portals, not in the Gazette.

A body corporate levy sale is a third thing again: a sectional-title scheme recovering unpaid levies, not a bank recovering a bond. The debt is smaller, the process is the same, and the buyer inherits the arrears.

Each listing here names which it is. Read that line before anything else, because it decides who you deal with and what you inherit.

What the reserve price does and doesn't mean

Why the number on the notice is a floor, not a price.

The reserve is the minimum the court will allow the property to sell for. It is set to protect the debtor from a sale far below value, not to tell you what the property is worth.

Bidding starts at or above it. If nobody bids the reserve, the sale is abandoned and usually re-advertised later — often with a lower reserve.

So a low reserve is not a bargain and a high one is not a valuation. It is a floor placed by a court that has not seen inside the house. Treat it as the opening number and price the property yourself.

The costs that land on top

Transfer duty, conveyancing, bond registration and Deeds Office fees.

The reserve price is what the sale starts at. It is not what the property costs you. Four separate charges arrive after the hammer falls, and three of them are payable whether or not your bond is approved.

SARS transfer duty is a sliding scale on the purchase price. Nothing is payable below R1,100,000; above that it climbs in bands to 13%. It is a function of price alone, so you can work it out before you bid.

Conveyancing fees pay the attorney who transfers the property into your name. Bond registration is a separate attorney bill for registering the bond itself, and it scales with the loan rather than the price — so a bigger deposit lowers it. The Deeds Office charges its own fee to lodge the documents.

The RepoLens bond calculator works all four out from a listing price. Open it from any listing and the price is already filled in.

The 21-day bond window

You bid first and arrange finance after. What happens if it does not come through.

At a sheriff sale you bid without finance in place. The conditions of sale then give you a limited window — commonly 21 days, but read the conditions for the sale you are attending — to deliver a bank guarantee for the balance.

You pay a deposit on the day, usually 10%, plus the sheriff commission. That money is at risk if the guarantee does not arrive in time.

Banks will lend on a sheriff-sale property, but they lend against their own valuation and they will not be rushed by your deadline. Get a pre-approval in principle before you bid, not after.

If the guarantee fails, the sale can be cancelled and the property re-sold. You may be liable for the shortfall between your bid and what it eventually fetches.

Arrear levies and rates you inherit

The municipal debt that follows the property, not the previous owner.

Municipal rates and service charges attach to the property. Before the Deeds Office will register the transfer, the municipality must issue a rates clearance certificate — and it will not issue one while there are arrears.

In practice that means the arrears get paid at transfer, out of the proceeds or out of your pocket, depending on the conditions of sale. On a sectional title the same applies to outstanding body corporate levies.

These amounts are not in the Gazette notice and RepoLens does not hold them. There is no monetary field on a listing beyond the reserve price, so nobody can tell you the number in advance.

Ask the sheriff and the attorney named on the listing for the figures before you bid. That is what their reference number is for.

Occupants, eviction and what it costs

The part most buyers price at zero.

A sheriff sale transfers ownership. It does not empty the house. If the previous owner or a tenant is still living there, removing them is a separate court process and it is yours to run once you own it.

Eviction in South Africa is governed by the PIE Act, which requires a court to consider whether the eviction is just and equitable and whether alternative accommodation is available. It is deliberately not quick.

Budget for months rather than weeks, plus attorney costs, and for the possibility that you are paying rates and bond instalments on a property you cannot occupy while it runs.

You can sometimes find out the occupancy position before the auction by asking the sheriff. It is the single most useful question you can ask, and the one most first-time buyers skip.