First published on Smart Property Investor Seriously – we get it. We get...
To Sell or to Auction? That s the question.
Selling your own home without an agent doesn’t limit you to a private treaty sale. Auctions are just as manageable and you can appoint a professional auctioneer, for considerably less than it would cost going through an agent.The real considerations are your own motives for selling, what works in your area and whether you are in a chain, and have to sell to meet a deadline to settle on another property. Many agents will encourage you to sell via auction, not least because it costs more to market an auction, and all things going well, has a finite end date, allowing them to move onto the next vendor’s sale. But if you are managing the sales and marketing process yourself, you have the luxury of being able to dispassionately consider the best solution for your needs.
There is no right or wrong way to sell. buyMyplace has compiled the pros and con of both, to make your choice a little easier:
- Going Going Gone -. All things going well, it will be over when the auctioneer yells “Sold!” Auctions create a sense of urgency and competition among buyers which can increase your sale price.
- No cooling off period – At auction, once the property reaches the reserve price, it will be sold.The sale is unconditional. Vendors can also specify settlement terms to suit themselves.
- Aguably higher prices – Vendors have security knowing the property must reach a minimum “reserve” price before it can be sold, and as there is no cut-off price, the end result could be fantastic for you.
- More than one way to sell – Vendors have three ways to sell. Buyers often make an offer before the auction to avoid stress at auction. Vendors can sell at auction, or, where a property is passed in, they can negotiate with highest bidder afterwards.
Auctioneer costs – There will be additional costs with engaging an auctioneer. At buyMyplace though, an auctioneer will cost you considerably less than via a traditional agent.
- Marketing Costs – Advertising costs are usually more expensive for an auction with a traditional agent, but at buymyplace, they are the same as private treaty sales costs.
- Pressure to reduce your reserve – Agents may pressure you to reduce your reserve price to secure a sale, but by selling yourself, you can escape this stress somewhat.
- Auctions don’t work in some areas – Some places, especially some rural areas, are less successful with auctions with high rates of passed in properties.
- Time is on your side – Private treaty sales suit those who aren’t selling urgently, need to time to find a new place, or are happy to negotiate different terms of sale such as extended settlements.
- Keep the details to yourself – In a private treaty sale, negotiations can be confidential, and not released to the public, unlike auctions where results are often published.
- Not so scary for buyers and sellers – Private treaty takes away the auction day stress and urgency, and vendors can take more time to consider offers.
- Cost – No need to pay an auctioneer. If you are going through a traditional agent, your marketing and advertising costs will be cheaper too.
- Price – In many states, vendors must advertise a price range of no more than 10%, whereas auctions which can go many thousands above reserve.
- Cooling Off Period – This gives the buyer around 10 days to change their mind without penalty, which can be frustrating for vendors after a sales campaign.
- Time – unlike auctions, private treaty sales can be on the market for some time, especially in rural areas away from the metropolitan centres.
Either way, you will save money on your commission if you decide to go with a commission free real estate company like buyMyplace. So the real question comes down to what is right for your own personality and set of circumstances.