The Difference Between Reserve Price and No-Reserve Auction Explained

The Difference Between Reserve Price and No-Reserve Auction Explained

Understand what 'reserve' and 'no reserve' property auctions mean in South Africa, and how each impacts buyers and sellers.

The terms of a property auction, like reserve and no-reserve, define the way in which the sale is triggered, sometimes with drastically different outcomes for both buyer and seller. Knowing which one you're dealing with before you bid or list your property changes your entire strategy.

A reserve price is the amount least a seller will accept for their property. It's usually kept confidential but is sometimes shared with potential serious bidders. If bidding reaches that level, the auctioneer will announce that the reserve is met, and the highest bid from that point on secures the sale. If the reserve isn't reached, the sale might be marked "subject to confirmation" - meaning the seller can choose to either accept or reject the highest offer within a set period.

Such a system helps to protect the seller from underselling, particularly in fluctuating markets. It also provides confidence to the buyer that once the reserve is met, the property will transfer without delay.

A no-reserve auction, also called an absolute auction, removes that floor altogether. The highest bid-regardless of amount-wins. This approach is used by sellers when a quick, definitive sale is needed, often in liquidations, relocations, or portfolio clear-outs. Buyers love no-reserve auctions because they can offer genuine opportunity to buy below perceived value.

But no-reserve doesn't mean "no risk." Buyers still buy voetstoots, and they're expected to pay deposits and balances quickly. Sellers, on the other hand, have to take whatever the market gives them — which is why good marketing and a strong attendance on auction day are so important.

At Dynamic Auctioneers, reserve and no-reserve auctions are structured with clear communication, verified documentation, and full buyer transparency. Whether you're chasing market exposure or liquidity, both formats can serve your goal when handled by professionals.

Understanding this difference will mean you can go into any auction hall or online platform knowing precisely what is at stake.

Want to know which auction model suits your property or investment goal?

Speak to Dynamic Auctioneers for a custom strategy that drives results — with clarity from start to sold.

These articles aim to offer insights only and in no way encourage reckless or hit-and-miss purchasing decisions.