The method you use when selling a house can indeed have a big influence on the outcome of the sale. You have the option of selling at auction or through a private treaty. Both methods are effective, but each has pros and cons. In many cases, sellers assume that an auction would result in a greater price, while a private treaty will be less stressful. Private treaty or auction? Which should you choose when selling your home?
Here’s everything you need to know about these two options and how to choose the best one for you.
What Is The Difference Between Private Treaty And Auction?
In a private treaty transaction, the seller sets the price, and the real estate agent negotiates with potential buyers to get the best possible price. Auctions, on the other hand, allow potential buyers to bid on the property at a predetermined location and time.
Pros And Cons Of Selling Via Private Treaty Sale
The Pros Of Selling Via Private Treaty
- Greater negotiation. There is room for negotiations on everything, including the price, the timing, and the terms of the transaction.
- Time. You will have more time to consider the offers given by potential consumers.
- Privacy. You’ll be able to keep price information private from the general public.
The Cons Of Selling Via Private Treaty
- Longer to sell. Potential buyers may not be compelled to respond as quickly as they would if there is no specified timeframe.
- Cooling-off period. Most private treaties have a cooling-off period, so the buyer can change their mind.
- Price is being pushed down. Buyers usually price lower. It’s likely to sell for less than you want.
Pros And Cons Of Selling At Auction
The Pros Of Selling At Auction
- Competition. Auctions generate urgency by setting an “end date” for the property, which can lead to greater bids and a higher sale price.
- Protected by the reserve. If you sell your home at auction, the reserve price protects you from cheap offers.
- No cooling-off period. The highest bidder who exceeds the reserve must buy the property, resulting in a speedy sale.
The Cons Of Selling At Auction
- Higher costs. The majority of auctions need a marketing budget in addition to real estate agents and auctioneer fees.
- No privacy. Auctions can discourage buyers who prefer private deals.
- Your property may fail to reach its reserve price. If your property reaches reserve, it won’t sell, and you’ll lose money for marketing expenses.
In the end, what works best for you is dependent on your specific circumstances and requirements. Consult an expert who specialises in auctions and private treaty sales. That way, you’ll be able to receive objective guidance as well as assistance in developing a strategy for the current market.
Please contact us today to learn more about how to sell your property smarter.