Sale vs Auction? Which one is best for you?

sale-vs-auction

 

Private Treaty? Auction? There’s two main ways in which you can sell a residential property in NSW; private treaty and auction. There are pro’s and cons for each of these selling methods, let’s look at them:

The Pro’s of a Private Treaty:

  • More control over the sale
  • More time to consider offers from potential buys
  • The ability to extend the time period for which your home is for sale indefinitely
  • Potential buyers must make “blind offers”, that is, make an offer without knowing what other buyers think your home is worth

The Cons of a Private Treaty:

  • Your property may not sell if you set the price too high
  • If the price is set too low, you may miss out on an opportunity to maximise the selling price

Additionally, with a Private Treaty, buyers have a five day cooling-off period where they can legally withdraw from the sale

The Pro’s of Auctions:

  • The buyer must immediately make a 10% deposit, then has a month to pay the remainder.
  • Potentially more people will view the property before auction
  • No listed prices, so potential buyers are more likely to attend and bid within their budget
  • “Bidding Wars” can push the price up beyond your expectations
  • Once the gavel is dropped, the house is sold, so buyers are unable to drop out at the last minute – there are laws which protect you
  • If your reserve is not met, you won’t be forced to sell, the auctioneer can withdraw the house from sale, and it can be relisted at a later date
  • Alternatively, if your reserve price is set too high and your home doesn’t sell, you can negotiate with any interested buyers after auction ends

The Cons of Auctions:

  • The competitive nature of the auction process can deter some potential buyers
  • Potential bidders must register to attend the auction, some people do not like doing this
  • There’s no actual guarantee that the home will sell, if it doesn’t, then relisting it may incur extra costs
  • If the highest bid price doesn’t reach the reserve price, your home will be “past in” and you’ll have to negotiate with interested parties
  • Your expectations may not be met; that is your home may not sell for as much as you thought it would which could leave you disappointed
  • Regardless of whether your home sells, you will need to pay the auctioneer, and this can outprice the costs of using a real estate agent for a Private Treaty
  • Your solicitor is required to be present at the auction, their time also needs to be paid for along with any additional fees they charge you for attending

Hopefully this information will help you to decide the best way for you to sell your home. For any further information, for quotes, fees and costs, give Degotardi Properties a call on: 4982 2726 or email us on info@degotardiproperties.com.au

We look forward to hearing from you!

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