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AT 11:00 on Wednesday, March 24 2009, Omniland Auctioneers sold the property I had bought at a sheriff's auction on July 4 2008 for R710 000, but which was unilaterally cancelled by First National Bank, for R770 000.
That sounds good, but unfortunately the net return for FNB - and therefore the unfortunate insolvent Mr Potgieter from whom the property was taken - was less than my offer.
Just to recap: I bought the property at a sheriff's auction for R710 000. The full amount would have been paid to FNB. Their representative at the auction accepted my offer, but FNB's Ms Julia du Rand Canton subsequently manipulated affairs in such a way that the sheriff's auction was cancelled. I nevertheless had to carry the cost of the sheriff's commission - R7 980.
FNB indicated that they were in any case not prepared to accept the legal sale of R710 000 for a property worth R1.3m (perhaps the value of the bank's mortgage). FNB defended its viewpoint on October 15 2008 in a comment on my original story.
The unfortunate owner has since been sequestrated and the property was sold on Wednesday by Omniland, which, incidentally, is the most boring auctioneer I have ever encountered.
The best offer was R770 000. But, unlike the net offer of R710 000 to FNB at the sheriff's auction, quite a considerable sum must still be deducted from the offered price.
Arrears on municipal rates and levies to the Home Owners' Association must now also be paid by the bank. That comes to just over R20 000. In the case of the sheriff's auction, those costs would be for the account of the buyer, but now FNB and, of course, indirectly the insolvent person has to pay them.
I suspect there's also something owing to the liquidator. No one's prepared to say anything, but those in the know say it could be 5% of the value of the asset that he wound up.
I estimate that the following has to be deducted from the gross offer of R770 000:
R35 112: auctioneer's commission
R10 000: auctioneer's advertising costs
R20 000: rates arrears
R35 000: liquidator
R50 000: loss of interest
R150 000: total (minimum).
The loss of interest on my cash offer of July 4 2008 until somewhere around the end of June 2009, when this latest sale is to be finalised, could be between R60 000 and R100 000.
The total loss for having an auction rather than accepting the sheriff's offer looks like more than R150 000. The auction price of R770 000 less these costs of R150 000 makes the net return of R620 000 much lower than my original offer of R710 000.
The difference of R90 000 or more is, of course, only temporarily for FNB's account. The poor insolvent Mr Potgieter will be liable for this for almost the rest of his life.
FNB's instructions to the attorneys to deliberately delay the transaction, "because we don't after all want to sell a R1.3m house for R710 000", will now probably cost the innocent insolvent person R90 000, while I've lost a R7 980 commission to the sheriff.
To all those involved, but especially FNB and the sheriff, on behalf of myself and the insolvent person: Thanks for nothing - and we hope you're proud of what you achieved.
- Fin24.com