Auction versus Private Sale
It is an important question that vendors face when deciding to sell and we are often asked “Should I auction my home or have a private sale?” There are many factors that often determines the answer such as; the property location, type, style, demand and timing. There are pros and cons for both selling at auction or a private sale, understanding these can be helpful in deciding which is most suitable for you and your property.
Auctions are particularly suitable to properties that are unique or in high demand, or the vendor is required to sell within a certain time frame. The auction environment creates competition and is a transparent process for all parties involved. An auction generally takes place after a 3-4 week marketing campaign, adhering to a stringent timeframe ultimately creating a sense of urgency and competitive environment amongst buyers. Selling a property at auction or under auction conditions provides for an unconditional contract on the day, thus providing assurance to the vendor there is no cooling-off provision or special conditions attached to the sale.
The main negative to an auction is the public nature of process. Some vendors aren’t comfortable with allowing open homes and conducting the sale in a public forum. There are other strategies that can be utilised implementing the auction process in a more private environment, such as inhouse or private auctions.
A private sale can be perceived as less stressful and offers more privacy for a vendor. Potential buyers can make an offer on the property, which is then presented to the vendor upon which they can decide to accept or reject. This method is often suitable for properties with less demand or slower market conditions. Through market analysis and comparable sales data, the vendor can be assured the price is set appropriately.
Private sales can be beneficial in that both the buyer and the seller have more time to consider offers/counter offers made and negotiate terms that suit both parties. For some potential buyers the auction process can be quite daunting and overwhelming with the ability to bid unconditionally on the day a risk or impossibility. The cooling-off period applies to private sales and there is provision for special conditions to form part of the contract.
Your agent should be able to provide advice on which method is suitable to your property and your situation, ensuring the decision assists in obtaining you the best result.