Understanding the Basics
In a private sale or private treaty, your property is placed on the market at an asking price or price bracket. You then wait to accept and negotiate offers from prospective buyers, which are usually subject to conditions such as finance approval or building and pest reports. There is no specified timeframe for the sale, giving both parties more flexibility.
On the other hand, an auction is a sale by tender at a time and date specified - usually onsite or online.
It is competitive bidding whereby buyers bid against each other. Where the last bid meets or exceeds the reserve price, the property is sold under the hammer. There are no conditions and no cooling-off, and settlement is agreed on. It's a prompt open process that works particularly well where there is competition in the marketplace.
The Case for Selling by Auction
In a hot market and with eager buyers - especially houses in sought-after suburbs - an auction can be quite powerful. Maybe the biggest advantage is the competition and pressure an auction provides. Having a date-certain auction date encourages buyers to move quickly, perform their due diligence within a time-sensitive period, and show up ready to bid. On the day of the auction, feelings can get high, and it is not rare for buyers to stretch their initial limits in the midst of competition.
Another essential advantage is the finality of an unconditional sale. When the hammer comes down, the sale is absolute. There are no finance conditions, no cooling-off periods, and no on-again, off-again negotiations that can collapse. This can give immense comfort to sellers under a deadline or those buying simultaneously.
You also have control with the reserve price so you will not sell for less than you want. If bidding does not reach the reserve, the property is passed in and can be negotiated on with the best bidder afterwards, often still securing a good outcome.
When Auctions Don't Work
But auctions aren't for every property or seller. Not all buyers are comfortable bidding at auction - particularly first-home buyers or purchaser-finance approval reliant buyers, who may struggle to obtain finance pre-approval without a signed sale agreement. If your property will attract that type of buyer, an auction may restrict your interest.
Auction campaigns do have upfront costs, including marketing, photography, advertising, and hiring a professional auctioneer. They are worth it with a positive result, but they are an investment you must be willing to make.
And while auctions can yield fantastic outcomes, they do not guarantee. If the property is not sold at auction and there is no frantic post-auction activity, you may end up having to sell through private sale, which hampers your campaign. In slower markets or in areas with fewer active buyers, auctions languish.
The Case for Private Sale
Private sale is the most common method of sale for real property in Australia, and for a good reason. It gives buyers more flexibility, especially where they are asked to make conditional offers. These can include conditions like "subject to finance," "subject to building and pest," or "subject to sale of current property." It thus becomes an attractive option for a broader section of buyers.
Another benefit is having more control over price negotiations. With a private sale, you can define your expectations in the form of a range or price, and have your agent manage interest and offers as they come along. This might be less stressful for some sellers who are uncomfortable with the openness of auctions.
Private sales usually carry less upfront marketing cost and allow you to adjust your strategy mid-stream if needed. If price needs to be smoothed out or customer response indicates a different tack, there is room to respond in the moment without the hard-and-fast deadline of an auction date looming over your head.
Private sale can also be appropriate for exclusive properties, high-end houses, or those that require more personalized effort to sell - especially if the buyer is a person who has the time to consider a greater value or more complex offering.
Disadvantages of Private Sale
The greatest danger in private sale campaigns is overpricing. With no built-in rush of the auction, overly priced listings can lie dormant, and that sounds alarm bells for buyers and can lead to disappointing offers down the line. It's essential to price your home correctly in relation to comparable sales and local market intelligence.
Private sales can drag on too, especially if you receive several conditionals that take time to finalize. Contracts will fall through, and with no competitive pressure, buyers feel safer haggling harder on price.
Even with its possible advantages, private sale requires careful pricing and an aggressive approach by your agent to keep momentum high and buyer interest ongoing.
How I Help Sellers Choose
So, how will it work for you? The answer depends upon your home, your potential buyer, where you are, and the market. This is how I generally counsel clients:
If your property is located in a popular suburb and is presented well with the potential to attract more than one buyer, then an auction can achieve optimal competition and produce a premium result. I will help you establish a realistic reserve, coordinate a campaign, and handle all buyer enquiries and feedback right up to the event date.
If your home appeals to a broader audience - particularly first-home buyers or families who may need conditions - private sale may be more effective. In this case, we'll launch with a sharp price strategy, leverage online marketing to generate interest, and be ready to negotiate confidently once offers start coming in.
Occasionally, I even recommend a hybrid strategy: opening as a private sale with an option to convert to auction if it heats up, or the reverse. Every campaign is tailored to the property and to your particular goals.
Final Thoughts
Selling your home is a committed decision, and finding the right method of sale can greatly improve your experience and your likelihood of success. Auctions introduce urgency, transparency, and hope of beating expectations, whereas private sale introduces freedom, confidentiality, and greater control of the negotiation process.
There is no one "best" approach - there is what works best for your situation. As your representative, my duty is to dissect the pros and cons, gauge the market, and point you in the direction most apt to deliver an outstanding outcome.
If you are looking to sell, or just considering your options, please don't hesitate to get in touch. I'd be delighted to offer you a free market appraisal and guide you through what selling your property could look like - be that through auction, private sale, or a hybrid solution that takes the best bits from both.