Professionals Clyde Poulton Real Estate
68 Bridge Rd Nowra
02 4421 2644
02 4421 2330Contact us
Whilst many would argue that auctions are the best way to secure the highest sale price for your property, others believe private sale is the way to go. As you will see from the information below, both have benefits and drawbacks, so make sure you talk to an experienced real estate agent to help you decide which best suits your needs and circumstances.
Selling at Auction
1) Sense of Urgency; Auctions generate a sense of urgency amongst buyers. This sense of urgency is due to there being a set ‘end date’ for the sale of the property and this compels potential buyers to make a decision on the day.
2) Competition Amongst Buyers; At an auction, competitive bidding amongst potential buyers means that the selling price often exceeds the expected value of the property, maximising the sale price for the seller.
3) Reserve Price Protection; An auction provides sellers with protection in the form of a reserve price. This means that your property will not sell unless bidding reaches a pre-agreed level. Further, there is no ceiling price, so you have the opportunity to achieve a price well above your expectations especially if there is a competitive crowd.
4) Set Terms; Auctions are suited to situations where the owner wants an unconditional sale (no cooling off at auction) or wishes to set specific terms of sale, such as settlement terms to suit the vendor.
1) Cost; There may be additional costs involved to sell a property via auction to cover the cost of hiring a specialist auctioneer. It is important to discuss and compare the costs to sell via auction or private sale with your agent.
2) Sales Evidence; For properties where there is ample accurate sales evidence, an auction may not be the best way of selling. For example, for a large block of identical units which are all of a similar specification, everyone would be aware of the sale price of other units, thus private sale could result in a higher sale price per property.
3) Special Conditions of Sale; Generally, auctions are not suited to buyers who wish to purchase subject to finance as often bids are unconditional. This limits the potential number of buyers that your property could appeal to.
Tips for a successful auction
Private Sale / Treaty
1) Less intimidating for buyers; For many potential sellers and buyers, the thought of an auction can be quite overwhelming and intimidating. For this reason, private sales / treaties can be beneficial in that sellers have more time to consider offers made by potential buyers and vice versa.
2) Urgency to sell; Private sales / treaties are suited to sellers that do not have an urgency to sell, and where they may be open to accepting different sale terms, such as an extended settlement period, sale subject to finance or subject to the sale of the buyer’s home.
3) Cost; Selling via private sale / treaty can often prove to be less expensive than an auction, as marketing campaigns for private sale properties are usually not as extensive. It is important to discuss and compare the costs to sell via auction vs private sale with your agent.
4) Privacy; As a private sale / treaty occurs through a negotiation process, it provides greater privacy and enables you to keep the specific details of the sale out of the public eye.
1) Cooling off period; Private sales / treaties are usually subject to a cooling off period, as a result the buyer could change their mind after contracts have been signed.
2) Sale length; Selling via a private sale / treaty method often can take more time than an auction. This is because there is no specific end date to give prospective buyers a sense of urgency. No deadline may also mean that potential purchasers may not be motivated to act as quickly.
3) Maximising the sales price; A key limitation of private sales / treaties is that the price is negotiated down compared with auctions where the bids increase. This means that the property is less likely to sell for more than the asking price.
Tips for a successful private sale / treaty
For more information please call Professionals Clyde Poulton Real Estate o 4421 2644 and speak to one of our sales staff.