Ray White Morphett Vale Selling Tips
Auction or Private Treaty?
So you've decided to sell your home, but are unsure about whether to offer it for sale by auction or private treaty?
Auctions are best utilised when there is likely to be multiple parties interested in purchasing the home. An auction is held at a pre-determined place and time and interested parties are invited to bid for a property in competition with other interested parties. About 10% of properties in South Australia are offered for sale by auction.
When selling property at an auction, the sale is unconditional - meaning that the buyer does not have the right to a cooling off period. The purchaser will also need to be ready to pay a 10% deposit on the day of the auction (unless arranged otherwise prior) and there is generally no 'subject to' conditions.
Auctioned properties have a reserve price set by the vendor. Reserve prices can change in the lead-up to the auction, based on comments made by prospective buyers. The reserve price should be realistic and one you're willing to accept.
Auctions are often used when vendors wish to sell the property quickly, as there is a set date for sale (subject to offers meeting the vendor's reserve price).
Sales by private treaty allow greater flexibility for negotiation. For instance, a contract can be signed 'subject to' certain conditions such as a building inspection or finance approval. There is also a two-day 'cooling off' period applicable to properties sold by private treaty which commences after the contract is signed by both parties and a Form 1 has been served on the purchaser.
When offering a property for sale by private treaty you have the ability to vary the price whilst it is on the market and you will also have the opportunity to consider each individual offer from potential purchasers. Your real estate salesperson will be able to offer advice on realistic selling prices and you can amend the details in your signed Sales Agency Agreement if required.
Both methods of sale have been working effectively for vendors for many years. Please contact us and we will be able to offer you more advice on which method is most suitable for your property.