Once you have decided to sell, the next decision is how? Well, that depends on your location, your personal circumstances, and your reason for selling. There are many arguments that speak for and against auctions or private treaty sale. Here are a few...
Location
Some locations are traditionally strong on auctions, such as Melbourne and Sydney, while other locations tend to be stronger on private treaty or private sale. Of course, both selling strategies are utilised in almost all locations across the country; however, it can be wise to go with the predominant selling style in your area. Your local real estate agent will be able to provide you with more information about trends in your region.
Timing
This is often the determining factor. If you need to sell quickly or the property has to be sold by a defined date, then auctioning may be the best way to go. Some may argue that a property could sell via private treaty prior to a well-planned auction campaign running its course, which varies anywhere from two to six weeks. On the flip side, an auction provides a focal date, and most properties sell either just before auction day, on the day, or shortly after.
If you have the luxury of time, a private sale allows your agent to plan a more thorough and targeted sale strategy, and perhaps access potential buyers you might miss in the rush of an auction.
Price
An auction offers the opportunity to achieve the best possible price at a moment in time, amongst the generally competitive buyers present. You also have the advantage of setting a minimum or ‘reserve’ price that you will take for the property. Worth taking into consideration though is the added expense an auction brings, such as the auctioneer and marketing campaign.
While it may take longer, a private sale may allow your agent to reinforce the advantages of your property to potential buyers and also negotiate terms that are favourable to the buyer, such as a quicker or longer settlement period. Such one-on-one negotiations could lead to a better sale price.
This means that if you are in a hurry or have pressing financial needs that motivate your sale, an auction may be best for you.
Privacy
Perhaps lowest on the matter of concerns, but still worth considering. How often do you want to open your home to potential buyers, and how many of them are you happy to have traipsing through your house? Does it bother you if your sale price is public information? A private sale may be more likely to deter those sticky beaks that turn up on auction days with no intention of buying. On the other hand, one of those casual voyeurs may just end up being your buyer.
So what do to do?
Auction clearance rates across the country have risen steadily in the last year, from 76.2% to 77.7% (according to macrobusiness.com.au), with the biggest jumps in capital cities. What this means is that more properties are actually ‘selling’ at auction.
At the end of the day though, every seller’s circumstance and home is different, and your agent is the best source for local market conditions and buyer habits. Do not make this all important decision alone.