SA Auction reserve

Questions regarding auction in SA, correct me if i am wrong, the sales agreement specifies a minimum acceptable offer by vendor, i have been told this will not be the reserve price on the auction? On the auction day, there will be a reserve price decided, which can be up to 10% on top of the minimum acceptable price on the agreement? Is that true?

 

Correct on 10% above listed reserve price.

 

If advertised online, has to be within 10% of reserve price. For this reason, most of them will simply not put a price so that the reserve is unknown.

 

Or if they do - for most +10%

 

So if I have a x reserve price in mind, is it wise to put that -10% in the sales agreement and then on the auction day put the +10% price as reserve?

 

Think you are overcomplicating it.

The agreement should be your price you are willing to accept if you put a lesser price (say 10% less) on the authority then technically the REA can claim commission for getting that price which was 10% less than what your actual reserve is.

 

But almost all agents would usually ask you to do it this way to attract more interests by not missing out buyers with lower price filter. Hm..... agents

 

You are taking the risk if you do comply.

Technically the authority is their job description so if you put 450k on the authority and they get 450-499,999 they did their job and could claim commission. Even though you were after a minimum of $500,000. Yes it isn't bad at 499,999 but when the offer is 450k and you don't accept they could still claim commission.

They might not enforce this as it would ruin their reputation but you are signing a legal document saying sell my house for 450k. Might be better to put TBA that way they cannot claim something.

 

That's what my conveyancer said, but if i put my real X price in the agreement, are they legally allowed to put in a lower range (i.e. -10%) in marketing sites? Cuz i have dealt with a few agents now and all of them come back to me with this talk, which is quite annoying. Are they really not allowed to set the minimum price a bit lower than my minimum price in RE or they just trying to make their jobs easier...