Auction or Private Sale?
We’re heading into the spring selling season and you might be considering selling your property. So, what method should you use? Auction or private sale?
There are a few key considerations and the answer depends on your circumstances, but what does the data tell us?
Last week (24th of August) in Melbourne there were 942 properties listed for auction and there was a clearance rate of 63.5%. A year ago, it was 69.6%. So that means approximately 1/3rd of all homes that go to auction are passed in.
Here are some other factors to consider as well:
Auctions are a quicker process; the turnaround time is roughly 2 months but for a private sale it could take an average of 6 months to sell.
Auctions are more likely to be successful when demand and competition is high.
Selling by auction provides reserve price protection and the seller can set specific terms of sale.
When the gavel falls and the property is sold at an auction, that sale is unconditional and the buyer is legally obliged to proceed with purchase.
Selling your house at auction is generally more expensive than a private treaty sale. Auctioneer's fees as well as a more extensive advertising campaign can add to your costs.
At an auction the top bidder is committed to buying the property – there's no cooling-off period as there is with private treaty.
The seller usually set the terms of the contract, whereas with private treaty sales there’s more opportunity for buyers to negotiate the details.
Having a fixed auction date for the sale of your property can be helpful if you’re buying a new property and need to coordinate the timing of your sale and purchase.
Whilst private sales may take longer, they give sellers ultimate control over more of the sale process.
Selling by private treaty, you set the price you want up front. Without a deadline there’s less pressure to accept low offers than there might be at auction.
It’s always best to speak to your estate agent to determine the best option for your circumstances.
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