There are two main ways to sell a property.
By auction or by private treaty (for sale).
Let’s start with auction.
Auction is generally favoured over private treaty for a number of reasons like;
It sets a deadline for buyers to make a decision
During the marketing campaign, buyer feedback can give indications for adjustments in market pricing – either for or against
There is an option to sell prior to auction for the right offer
In most cases, the contract of sale is unconditional
The auctioneer can help to push the price
Under the right conditions and a good market, the property can sell for more or much more than originally expected
If the property doesn’t meet reserve and the owner wants to sell, they can meet the market at the highest bid, lower their reserve and sell it on the day
Alternatively, the vendor can choose not to sell if it doesn’t meet their reserve
If it doesn’t sell at auction it will then usually sit on the market for sale
Private treaty on the other hand means that the property will usually sit on the market until sold.
This gives the vendors greater freedom of choice however, a fixed price or price guide is usually placed on the property.
So selling by auction is better?
It is usually the preferred method, particularly in NSW and VIC, but it does depend on a few factors, mainly being the current market and the property.
That being said, not every property is suited to be an auction property and vice versa.
Again, it comes down to the current market and the property.
For example, renovation projects or ‘fixer uppers’ in a good location may be better suited to auctions.
While entry level apartments that would mainly attract first home buyers may be better suited towards private treaty.
You can follow the agent’s suggestions however, some people just prefer one way or the other for whatever reason they have.
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This information is of a general nature only and does not take into account your objectives, financial situation or needs. We are not financial, legal or tax advisers. You should seek appropriate professional advice specific to you before acting on this information.
