More than R38,000 down the drain in trying to buy a house
CONSUMERS can lose thousands of rands investing in houses they will never occupy, let alone own.
Some people think buying a house at an auction is a piece of cake. But there are risks and losses involved.
Prospective buyers are in most cases not able to inspect the house because the occupants refuse to move out. And having obtained an eviction order, they may still not be able to occupy the house because the occupants demand alternative accommodation.
And some buyers lose their money because they do not understand how auctions work.
Shado Mthunzi and her spouse lost R38,338 they paid to an agent, thinking they were paying the deposit for a house.
They blame the agent for not explaining that they were not paying the deposit, but the commission.
Mthunzi saw the house on sale on the internet, advertised by Dynamic Auctioneers on Property24 for R730,000.
She enquired and received a telephone call from Ben Lubbe, an agent. He told her the price had dropped by R120,000 and she asked to view the house.
The couple did not attend the auction and though they were not subjected to the rule operating at auctions, Mthunzi was not told that they would lose their money if they failed to raise the full amount, Mthunzi said.
Lubbe advised them to pay the R38,338 to secure the house .
Mthunzi said Lubbe insisted that they pay the deposit before they could sign the contract.
"We raised the money and deposited it. We later met him at a restaurant to sign the agreement," Mthunzi said.
They could unfortunately not get finance for the full amount, she said.
"Lubbe took his commission under the pretext that it was a deposit and did not disclose that we would forfeit it if we failed to get finance," Mthunzi said.
She said Nedbank asked Lubbe to rectify the contract to show they had paid the deposit, but Lubbe refused.
She said they were only referred to the terms and conditions of the contract when they demanded their money back.
"Their contract is confusing. They refer to a deposit, not a commission," Mthunzi said.
Lubbe told Consumer Line he had explained the procedure to Mthunzi.
He said the contract allows them, on confirmation of the sale, to deduct commission, cost of the auction, advertising and other costs from the deposit.
Leon Roux of Dynamin Auctioneer said Mthunzi signed a binding agreement that was fully explained.
He said they forfeited the deposit due to non-compliance of the terms and conditions of the contract.
"Although they were fully appraised of the reasons of the forfeiture of their deposit and were unhappy, they never approached us for several months to pursue the matter," Roux said.