Many sellers come to the market unsure of whether they should sell their property via auction or private treaty. Both options are popular in Australia and both methods have certain advantages and disadvantages over the other.
Selling via auction
When you sell at auction, the person who makes the highest bid at, or over, your reserve purchases the property. An increasing number of residential sales have been made via auction over the last decade, although data from CoreLogic show that auction clearance rates on the Gold Coast are dropping.
Pros
- As a seller you can set the reserve price and settlement date that suits you.
- Auctions encourage competitive bidding. If you have 2 or more interested buyers your property may sell for far more than your reserve.
- You have the option of selling your property prior to the auction, on auction day, or if it is passed in, immediately after the auction.
- You can pre-arrange viewing times for when it is convenient for you.
- There is no cooling-off period. Once the auction has been won, the highest bidder is legally required to sign an unconditional contract of sale.
Cons
- Marketing costs for auctions are generally greater for auctions than private sales. Local advertising including signage, newspaper adverts, flyers, notice boards and personal invitations as well as social media and online advertising are crucial to ensure a good turn out on auction day.
- Auctioneer’s fee. This is payable in addition to any real estate agent fees and commissions.
- You may feel pressured to reduce your reserve in order to get a sale on auction day.
- If your property does not sell at auction, you still need to pay the auctioneer’s and marketing costs.
- Many buyers are wary of buying at auction because the contract of sale is unconditional.
Selling via private treaty
The majority of residential sales on the Gold Coast are made via private treaty. Private sales usually involve a real estate agent finding and negotiating with a buyer on your behalf.
Pros
- Private treaty sales offer room to negotiate. Contracts of sale can be made subject to certain conditions that both the seller and buyer agree to.
- Unlike auctions, private sales have flexible time lines—you are not working toward a specific date.
- Marketing and promotional expenses are less. Some agents, like Elanora Realty, do not charge up-front marketing fees.
Cons
- When compared to an auction, your property may take longer to sell.
- You may need to make your home available for frequent viewings at short notice.
- If you get your pricing strategy wrong your property could sit on the market for a very long time.
As you can see there is no right or wrong way to sell your house, the method you choose depends on your personal circumstances. At Elanora Realty we provide honest real estate advice you can trust. For more information, download our free property sellers’ guide or contact us to organise your free property appraisal today.
