The two most commonly used ways to sell a home in Sydney’s Inner West are by private treaty or via auction. Understand which option is best for you.
While some real estate agents might try to push you towards one or the other based on their personal preference, there’s no cookie-cutter approach to knowing which way you should go. Factors such as market supply and demand, personal situations, location and the type of property all affect the decision.
What to consider when selling at auction
While some people think that auctions can be stressful, it’s usually because they only focus on the auction day itself. A properly structured auction campaign will take place over a four-week period and it’s the process from start to finish that delivers the result. This fixed marketing period gives you greater control over sale timing. It allows you to assess buyer feedback as you build up towards the auction day, which itself will act as a deadline and create urgency for buyers.
In the current market, close to 50% of properties listed for auction will sell before the auction itself, meaning sellers were offered a price they were happy with, usually as a result of buyers wanting to avoid competing for the property at auction.
While not all properties achieve a sale within the initial auction marketing period, the vast majority of properties listed for auction will sell within a couple of weeks of their auction date. The feedback obtained during the auction process helps to establish correct pricing.
Properties that do best at auction
Although there are no fixed rules about which type of properties are best sold at auction, there are a few that tend to be well-suited.
Deceased estates and properties that are being sold in a divorce settlement are two examples where auction are the most appropriate method of sale. Auctions are very transparent, and the sale price is determined through an open market process, so there’s no opportunity for beneficiaries to claim that the property was sold below market value.
Unique properties are also best suited to auction. If a property does not have any direct recent comparable sales, the auction process will allow free and open market competition to determine current market value.
What to consider when selling by private treaty
Although there are clear benefits to auctions, there are some buyers who find the auction process too intimidating and will avoid them at all costs. Listing a property by private treaty allows you to engage with 100% of buyers in the market. Given that there is no set sale date, private treaties allow you to start negotiating immediately and in a strong market it is possible to sell very quickly using the private treaty method.
Private treaties also work well when you’re not under any pressure to sell within a certain timeframe or if you are only motivated to sell if a certain price can be achieved. Because auctions have a set date, they allow better control around timing and can be better for people with a fixed deadline.
Properties that do best by private treaty
In some cases, selling by private treaty can be a bit of a guessing game, with the worry that if you sell quickly then you could have held out for a higher price. The exception to this is when directly comparable properties have sold recently in your area or units have sold within the same apartment block that are in similar condition, size and layout.
Sometimes it’s possible to capitalise on a recent comparable auction sale by selling to an underbidder via private treaty because the market price has already been established.
Always speak to a real estate agent
Some real estate agents will robotically steer you towards one sales approach or another, but this is not my approach. Each client and each property deserves bespoke advice for their particular situation so that we can achieve the best result.
There’s no one-size-fits-all approach to listing and selling a property in Balmain, Rozelle, Lilyfield or the Inner West. Knowing whether to sell your home via private treaty or auction depends on many factors. Some reasoning may be specific to you and your goals, while other reasons may be relevant to the type of property, and what’s happening specific to your area and the broader market.
An experienced real estate agent will help you understand what’s the right home sales approach for you and steer you in the right direction.