Auction or private sale: What sales mode is best for you?
There are lots of important decisions to make when considering selling property, but one of the crucial choices that needs to be made is the method of sale.
Whether you opt to take your home to auction or sell through private treaty will depend greatly on the local market conditions, your desired timeframes and potential risks during the sales processes.
Mont Property Managing Director Matthew Podesta said Mont agents were adept to advising prospective sellers about the best avenues for sales depending on their personal circumstances.
Mr Podesta said the auction market had turned out some exceptional and surprising results in the area in the current market and was an increasingly favoured mode of sale.
He said auctions were suited to in-demand and out-of-the-box properties; and often became emotional transactions, with vigorous competition amongst buyers driving the price up.
“Auctions can be good for sellers because the event creates competition, they’re completely transparent and people tend to get caught up in the hype and emotion, which can be good news for the seller,” he said.
“Auctions are particularly useful when dealing with situations like deceased estates, mortgagee sales or where there are multiple owners who require full transparency and can have comfort knowing there’s a conclusive and finite result in the process.
“The downside can be that in a slowish market if you don’t get the right interest on then day or there appears to be a lack of competition, it can hinder the chances of buyers engaging and being competitive.”
Mr Podesta said auctions had been especially successful in Perth’s current market, where there is an appetite for quality properties but a short supply of listings. For example, Mont sold a 706sqm block of land at 23 Gairloch Street, Applecross for $1.78 million – $180,000 over the expected $1.6 million mark.
On the flipside, the Perth market has long favoured private treaty sales, in which properties are marketed and prospective buyers make offers through the agent.
Private sales, which have been considered as a safer, more comfortable option, offer greater flexibility, increased privacy and are believed to be less stressful than an auction.
“Private treaty sales are good because you can harness mixed interest in the property and it’s easier to entertain subject to sale buyers as well as finance and cash buyers,” Mr Podesta said.
“You also have scope to reach the entire market and are not bound by time constraints like you are with an auction.
“Ideally, you can act as soon as you have an offer or offers that the seller is interested in and there is complete flexibility both from sellers and buyers and it allows an environment where you can to-and-fro to fine-tune the perfect result.”
Those who like elements of both sales methods may consider a set date sale or offers campaign, where prospective buyers submit their best offers or expressions of interest by a specified date.
“The sale by set date scenario can also be quite good if a seller wants the best of both worlds,” Mr Podesta said.
“It’s a private treaty format but borrows from the ingredients of an auction whereby there is a cut-off date or time where all interest needs to be finalised and presented at once to the seller for them to make a decision.”
Mont is available to guide prospective sellers about their sales options. For advice about how to best market your home for sale, contact us.