Choosing the right marketing method for your property can be one of the biggest decisions you have to make.
In a strong real estate market vendors (sellers) are choosing to sell their homes through auction rather than via a private treaty sale. When prices are going up buyers are keen to buy. People don’t want to miss out on securing a property in an upward trending area where or missing out and having to pay more as prices increase. Auctions can encourage buyers to outbid each other as they can get caught up in the excitement and pace of the event and the drive to ensure they secure your property. The seller knows exactly when a sale and settlement will occur in the event of a successful sale. The benefit of this is being able to plan ahead with your next move.
For locations that are not experiencing a demand for properties or an increase in property prices an auction may fall flat. This is when you might consider a private treaty (sale by price). Sale by private treaty requires the seller to set a price from the beginning of the campaign. Ask for guidance from your agent when establishing your asking price and refer to comparable sales in your area. In general, sale by treaty gives the seller greater control over the sale, more time to consider offers by potential purchasers and the ability to extend the time the property is listed on the market Plus potential purchasers must make offers on your property without knowing what other buyers are willing to pay.
The Pros and Cons of Each Option:
- You can achieve a good price due to competition
- Auction day is the final sale date
- A quick settlement is possible as sales are unconditional
- You need to find an alternative sale method if the property does not sell
- Marketing campaigns can be costly
- There is no guarantee of getting the price you want
- You can negotiate the sale price with buyers
- You can set specific requirements such as a settlement date
- Marketing campaigns are generally less expensive than for auctions
- There is no definite sales date
- A sale could take longer if you can’t negotiate your desired price
- You may need to open your house for inspections for a long period and more often
At the end of the day both process work and it’s a matter of working with the process that you and your agent are most comfortable with.