There are a lot of important decisions you have to make when selling a property, but one of the most important ones to make is the method in which your home will be sold – auction or private sale?
When making a decision on which method to go with, you should weigh up the pros and cons with your agent to ensure the best outcome for your situation. Auctions are a very competitive and public process that can often drive up the selling price. Private sale is the more traditional method of selling where the property is listed through an agent who then markets the property and presents offers back to the seller.
So what do you need to know about each method of selling?
Selling at auction:
Auctions are generally held at a certain time, place and date after a marketing campaign conducted by the agent. It’s a transparent selling method and is governed by strict government rules and regulations. This can differ between states and territories. Auctions can be run onsite or in an office and the property will sell once the reserve price (the lowest amount the vendor will sell for) is reached.
This method of sale is quite popular in larger urban areas like Melbourne and Sydney. Due to the emotional nature of auctions, they can create a sense of urgency among buyers and drive competition. They’re also suited to properties that are in high demand or will appeal to multiple groups. However, auctions do not have a cooling off period.
If you’re uncomfortable with the idea of a public auction you can choose to have a private one, with invited bidders only in attendance. These are usually vetted prior by the agent.
Selling via private sale:
For this selling method, prospective buyers make offers to the agent who will then present them to the vendor for their consideration. It’s widely viewed as the less stressful option and can be much less expensive overall. There is a cooling off period for the buyer to change their mind so this may impact the decision making process of the vendor when deciding how to sell their property.
Making the decision to sell via auction or private sale can be affected by a number of different variables, including how many listings there are in the current market in your area, and whether or not the home will appeal to different buyer groups such as down-sizers, investors or first home buyers. Working with your real estate agent closely will ensure you choose the best approach and get the best outcome.
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