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What Is the Best Way To Sell Your Home? Private Sale or Auction?

By Tamara Lloyd

This is a very interesting question…. This is also a question I’ve been asked hundreds of times by sellers, and a debate I’ve had hundreds of times with real estate agents! In fact I’ve even had internal fights with myself on this and changed my mind several times over the years!

So, if it’s that difficult for me to answer – how on earth are you going to know?

Perhaps then the best way to tackle this question is to give you the facts about each method in the current real estate climate and then you can decide which makes more sense to you!

Let me start by saying over the past 3 months we have list and sold about 50% Private Sale and the other 50% Auction – so we do both really well and constantly work on our strategy with the team around both methods – especially when the market changes as it is in the midst of doing right now. I will make this as relevant as I can using information from the last 3 months.

PRIVATE SALE FACTS

  • Our days on market last 3 months = 22 days
  • Average Sale price over vendors expectations = $23,000
  • Private sales are often subject to finance – this has been an issue over the past 12 months since banks have been under tighter scrutiny by government.
  • Full 10% Deposit usually paid in line with the finance clause, so could take 2 weeks, sometimes more.
  • Marketing campaigns usually need an investment of $4000 – $5500 for a quality campaign that’s not over the top, but that covers all bases.
  • You can put an end date for taking offers on Private sale, though it’s not as rigid as a public Auction date.

AUCTION METHOD FACTS

  • Our average days on market over last 3 months = 22 days (exactly the same as private sale)
  • Average Sale price over reserve = $52,000
  • Current Melbourne auction clearance rates sitting over 80%
  • Auctions are Unconditional – No 3 day cooling off (3 business days either side of auction day)
  • No subject to finance, No subject to building inspection (they have to be done prior to auction day)
  • 10% Deposit paid on the day or next business day at latest
  • Auctioneer is an additional cost of usually around $500 – $600 for a quality career auctioneer
  • Marketing campaign same amount as private sale campaign cost wise
  • Auctions give you 3 timeframes/opportunities to sell – before auction, auction day or after auction.
  • The nature of auction means buyers have to make a decision by a set date.
  • Auctions can happen on site, or off site (we call them in room auctions).

I hope this helps you understand the two methods better – both work well, but they are different legally as well as the actual process. Agents need to be well trained in running auction campaigns as they are quite different to private sale. If you would like to talk to me or one of my experienced team pleased feel welcome to call on 0408 585 319 or 9725 7444.

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