Both methods have been used by almost all real estate agents for more than 100 years as the most common ways to sell a property.
During the past five years we have seen the auction method working to huge success. Many major television networks in Australia have devoted regular programs to property auctions – with great ratings rewards.
Many people believe that auctions cost more than private treaty. This is simply not the case. Marketing costs are the same for both methods.
There are different reasons for choosing a method of sale, and your agent will discuss this with you. Below is an explanation of each method and some of the advantages.
- PRIVATE TREATY – involves selling through the setting of an asking price. The property is sold through negotiation around that asking price. This is a very popular way to sell. Vendors must establish an asking price that will be competitive within the existing market – and also with those other properties that are already for sale. It is important to get this asking price right. A price too low will cost the vendor dollars, while a price well above market value makes other properties attractive and will cost you potential buyers, your time and marketing costs.
- AUCTION – involves a public sale where the property is sold to the highest bidder, after the vendor’s reserve price has been reached or exceeded. There is no cooling off period with auctions and contracts are exchanged immediately following the sale. This contract is unconditional and the successful buyer will be required to pay an immediate deposit, usually 10 per cent. If the property does not meet the reserve it is passed in.
Blackleys will discuss the best method to sell your property, based on a range of factors including the current market conditions, the appraisal value and type of property.