In a property landscape the likes of which even veterans of the industry are saying they’ve never witnessed, what are the pros and cons of an auction strategy versus private treaty?
For the buyer, an auction might feel like a double-edged sword. Because there is no price indication, and because they have to bid in what may feel like a stressful environment.
However, buyers shouldn’t be put off by the auction process as it’s actually the most transparent way to conduct the sale of a property.
As a buyer, you’ll know exactly what other buyers are bidding and willing to pay, so that on the day, if you are the successful bidder, you can be assured you paid the right price.
As the seller, you’ll also know that you received the highest price the market was willing to bear, and in this hot market, there are more buyers and sometimes less properties for sale at any given time, which is the ideal environment for a seller. Auction conditions favour the seller too as it’s a cash unconditional sale with no cooling off period.
Private treaty also has a place in today’s market conditions.
An agent’s number one priority is to create the highest price possible for their vendor’s property. Your agent might advise you to go down the private treaty path if you’re wanting privacy, or more time up your sleeve to deal with each offer as they come along.
Of vital importance in the private treaty method is the setting of the asking price. Your agent will supply you with a CMA to help determine the list price.
Buyers often prefer this method of sale as they’re given a rough idea of what price the vendor is aiming for and are able to negotiate conditions in the contract to suit their needs such as a building and pest inspection, and a finance clause.
Cons to the seller for the private treaty method include: the contract is conditional for (usually) a week or two after the contracts are exchanged, if a vendor is under time pressure, a private treaty sale may take longer to finalise, however, this is not always the case and private treaty sales can happen quite quickly in some circumstances.