With markets across Australia collecting steam, many owners may be considering the value of selling their property under the hammer.
For properties appealing to a wide range of buyers, an auction enables multiple bidders to jockey openly for your property under the supervision of an experienced auctioneer either onsite or at a specialist auction room.
If there’s plenty of interest at an auction, multiple bidders can help you achieve a far higher price. Moreover, you can set a reserve price, which is a limit below which a vendor won’t sell.
At this juncture, the auctioneer or your agent can go back to bidders to see if they will increase their offers, or you can choose to put the property on the market and sell via private treaty.
That said, properties sold at auction generally spend far fewer ‘days on the market’ than homes sold via private treaty. The fact that auctions have no cooling off period can also be appealing to owners, with contracts exchanged immediately after the sale and a deposit paid.
Indeed, with the onset of summer, metropolitan auction clearance rates continue to underpin the strength of markets across Australia. In Melbourne, for example, auction clearance rates achieved 74% in early December compared to 45% last year, according to research from Domain. Even for the smaller capitals such as Canberra, auction clearances are significantly stronger. In the Nation’s Capital, auction clearances were under 50% last December and are now nudging 70%.
While an auction marketing campaign can involve a higher investment than a private treaty sale, an under the hammer sale creates a sense of urgency and forces buyers to act, reducing the time a property is on the market.
The private treaty method of sale, which relies on negotiation around an established asking price, is still a popular way to sell properties in Australia. Under private treaty conditions, there is no set timeframe for buyers to act, and sellers can canvas the market over a more extended period. This can increase the chance of landing the right buyer.
A private treaty sale may not suit those looking for a quick result, but this is where the choice of agent is most important. The agent you choose for a private treaty sale should be close to the market in terms of setting the right price and generating buyer interest.
Before choosing a method of sale, make sure you speak to your experienced local Raine & Horne sales agent to discuss your property goals for 2020.