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Private sale or estate agent: how to decide
Selling without an agent saves you the commission, which is often quoted at about 5% to 7.5% plus VAT. In return you take on the time, the risk and the paperwork. The better choice depends on how much time you have, how confident you are with contracts and how hard your home will be to sell.
What an agent costs
Commission is negotiated. There is no standard rate in law, so the figure on the mandate (the agreement that appoints the agent) is whatever you agree. Using the quoted range as an example only, here is what it means on a R1 500 000 sale:
- At 5% plus VAT, commission is R75 000 plus R11 250 VAT, so R86 250.
- At 7.5% plus VAT, commission is R112 500 plus R16 875 VAT, so R129 375.
You pay commission only when the deal succeeds, as the mandate sets out. Read the mandate to see exactly when it falls due. See estate agent commission explained. A private sale does not remove all costs. You still pay for the bond cancellation, a transfer attorney and any compliance certificates, and any marketing you choose to buy.
What an agent does for the money
- Advises on a price from knowledge of local sales.
- Markets the home and brings buyers.
- Arranges and attends viewings, so you do not let strangers in alone.
- Screens buyers and checks that they can get finance.
- Handles the disclosure form and the offer, and negotiates for you.
- Follows the sale through to transfer.
An agent is a professional you can hold to account. A registered property practitioner has to hold a valid Fidelity Fund Certificate, and cannot claim payment for work done without one. Before you sign, ask to see it. See how to choose an estate agent.
An agent’s skill and effort vary, and no one can promise a sale or a price.
What you take on if you sell privately
You do all the jobs in the list above. The legal side also lands on you. A sale of land must be in a written, signed contract. You must handle clearance certificates, compliance certificates and the bond cancellation. You have no duty to use the agents’ disclosure form, but you should still tell buyers about defects you know of, because hiding them can defeat a voetstoots clause. Read how to sell your house privately for the steps.
Questions that help you decide
How much time do you have?
Viewings happen on weekends and evenings, and buyers phone at odd times. Some homes sell in a week and some sit for months. A private sale takes more of your time, especially if you work full-time.
How comfortable are you with contracts and pricing?
If the idea of negotiating a price or checking an offer to purchase worries you, an agent is a help. A conveyancer can check a contract for you even if you sell privately, which cuts the risk but adds a cost.
How easy is the home to sell?
A well-priced home in a popular area may attract buyers on its own. A unique home, or one in a slow area, may need an agent’s reach and network.
How much is the commission worth to you?
Take the commission as a rand figure, not a percentage, and compare it with the work you would do. If an agent can get you a better price or a faster sale, that may outweigh the fee. If they cannot, you pay for nothing. Nobody can promise either result, so test the agent’s reasons before you hire.
A middle route
You can also start privately, then hire an agent if nothing happens after a few weeks. Be careful: if you sign a sole mandate, you may owe commission even if you find the buyer yourself, depending on its wording. An open mandate lets you use several agents or sell yourself. See sole mandate or open mandate.
What to do next
- Work out the commission in rands for your likely price.
- List the tasks you would do yourself and how much time they will take.
- Speak to two or three agents, and ask about their fees and mandate terms.
The estate agent commission calculator shows the cost at your price. You can find a local agent through find an agent or find an agency.
This article is general information for South African readers, not legal, financial or tax advice. Rules and rates change, so check your own situation with an attorney, your bank or a tax practitioner. Our property calculators can help you work out the numbers.