Sell at Auction or Private Sale?
We don’t need to tell you that buying and selling a house ranks up there as one of life’s more stress inducing events. The experienced sales team at MRE work closely with each of our clients to ensure you are right across the potential benefits and, equally, possible limitations, both Private Sale (otherwise known as Treaty) and Auction can afford.
Private Sale / Treaty
- Flexibility: You can advertise with or without a price, choose when or whether to have open inspections and take advantage of an agency’s buyer database for a more secret squirrel campaign.
- Non-intimidating: Both buyers and sellers can occasionally find the prospect of an auction to be an overwhelming proposition. Private sales allow both parties more time to breathe deeply, consider offers and negotiate, cool as a cucumber.
- Non-urgent: With no set limits on time, private sales may take a week, a month or even several months. This is ideal for vendors with the luxury of not being compelled to sell quickly, who may be open to extended settlement periods, a sale subject to finance or even the sale of the buyers own home.
- Discretion: The specifics of a private sale can be kept under wraps, as it all occurs through a direct negotiation process and not in full view of a curious public.
- Cost: While a private sale can prove less expensive than an auction due to the scaled back nature of the marketing campaigns, it’s important to note that you can’t sell a secret, so be guided by your agent’s expertise on a suitable advertising strategy.
- Cooling off: Private sales are subject to a cooling off period, which differs from state to state, but in Victoria, is three days following the signing of a contract for residential and rural properties less than 20 hectares. #buyersremorse
- Sale duration: Anyone keen for an expedient result may find that without a specific end date to galvanise prospective buyers into action, the entire process can potentially become a protracted one.
- Top Dollar: Without the prospect of an Auction bidding war between highly motivated and revved up participants, private sale prices tend to be negotiated down by the individual parties, meaning the property is less likely to sell for more than the asking price.
- Urgency: Following the conclusion of an energetic marketing campaign over several weeks, a competitive Auction with a fired up auctioneer, creates momentum and impetus for potential buyers to make a quick decision on the day.
- Competition: The Auction system is particularly effective in highly sought after areas, where competition between buyers is expected to be high. With no ceiling price and some keen would-be buyers, this often results in a much higher than vendor reserve price.
- Reserve: Sellers are protected from a less than satisfactory outcome in the form of a reserve price; meaning that the property will not sell unless the bidding reaches the pre-agreed reserve price and can be passed with the option to then be privately negotiated.
- Terms: Auctions afford vendors the opportunity to set specific terms of sale that work in their interest, such as unconditional sales that preclude buyers from cooling off at auction.
- Budget: A targeted marketing campaign and specialist auctioneer with a proven track record in the area, will generally come with higher costs than if you were to sell privately, however, they are equally vital for a successful outcome.
- Comparative sales: There are definitely some scenarios where an Auction would not engender a higher sale price, such as a large block of identical apartments where the sale price of individual properties is public knowledge. Private negotiation is a smarter option in this instance.
- Sale conditions: Due to the conclusive nature of the Auction sale, any buyer whose purchase is subject to securing finance will potentially be ruled out of bidding, thereby reducing the potential number of eager beaver buyers on the day.