Less common is the selling of homes by auction. Locally there is still somewhat of a stigma attached to the selling of homes by auction as this is the platform typically used to sell repossessed residences. Contrast this with countries like Australia where the auctioning of homes is the norm. But the auction image may be changing. Joff van Reenen of High Street Auctions tells that 95% of their residential properties are private sales and very few are legal sales (e.g. reposessions). But for High Street Auctions, the “auctionability” of the property is what counts. And it is one of the reasons why around 50% of properties are not accepted for auction, having not met their ratings criteria. WHAT YOU CAN EXPECT TO PAY (BASED ON SALE PRICE OF R1 194 200 AND CAPITAL PROFIT OF R556 900)
11.4% (10% plus VAT). Paid by buyer* Approx. R13 680-R22 800 (incl. VAT)
and upward R544 900–R536 900
2.5%-4% and upwards depending on property and marketing requirements. REASONS FOR USING AN AUCTION HOUSE: On average, properties stay on the market for 12 weeks before selling. For sellers requiring a quicker process, auctions, which occur monthly or even weekly, may be the solution. Sales are nonconditional and immediate as the platform requires cash or pre-approved finance buyers. Buyers pay the commission fee and auctions also present the opportunity of securing a sale in excess of the reserve price. But sellers do incur marketing costs whether or not the property sells.