9th March 2015
Auction or Private Treaty?
Is it best to take your property to auction or advertise with an asking price (private treaty).
It generally depends on a range of factors including motivation of the owner, the type of property and the stage of the market cycle. A recent case study of two adjoining properties sold within 2 weeks of one another having similar attributes, is an interesting contrast of these two methods of sale.
Property A – Advertised with a list price of “Offers Over” with inspections by appointment. Property was under contract after 4 weeks on the market and sold for $700,000 subject to building and pest inspection.
Property B – Advertised for a 4 week marketing period with an open house campaign having a well attended auction held off site. No formal price guide was provided but the marketing agent indicated strongly to prospective buyers that that the property would be sold at auction. Property sold for $616,000.
Both properties had the same land area and had buildings of a similar era which required renovation. The purchasers of Property A were completely aware of their competative bid at auction. The purchaser of Property B felt compelled to make an offer in accordance with the marketing guide provided by the selling agent and had to make their best offer up front.
Questions….Did the purchasers of Property B put in their best bid, or just enough to secure the property on the night of the auction. Were there other purchasers interested in Property B that were not able to arrange finance in time for a unconditional purchase on auction night?
At the end of the day, both owners achieved a result, however we suspect that one would have been more satisfied with the selling process than the other!