Looking at the different methods for selling a property, you’re right to wonder what the pros and cons are of auctions and private treaty sales. While private sales allow for greater flexibility for negotiation and don’t come with the additional marketing costs often associated with an auction (such as the cost of an auctioneer), you have the potential downside of frequent viewings to consider as well as the possibility of a longer period on the market. You also need to be able to trust your agent to list it at the correct price so you don’t sell it for too low a price or scare buyers off with a high price. However, while auctions encourage competitive bidding - if there are enough buyers interested - you have to weigh this up against the higher marketing cost. You should also be certain that there is enough interest in the property to draw enough people to the auction.
Dr Andrew Wilson, Domain Group’s senior economist summarises the decision perfectly: “If the market is hot and your property is in demand, you can make a killing by going to auction. If it’s not, or your property isn’t much sought after (or both), you are probably going to be better off [...] going with a private sale [...].” (To auction or not to auction, that is the question)
It is important to know your market and this is where your real estate agent’s expertise comes in, as they can easily assess the market situation and know what the best way is to sell your property in your area. Unlike a pro and con list you might read somewhere online, your agent is in the unique position of knowing both your local market, yourself and your property. As Prudential Real Estate Director Michael O’Sullivan with his decades of experience in property sales says: “Some hairstyles suit some people.” Just like your hairdresser might know best which cut and colour suit your face, your agent will know which selling method will go best with your personality and your property. In Michael’s experience, the houses that are best suited to go to auctions are the ones that have specifically unique features, for example some executive homes or connected duplexes, which will attract a specific demographic with a niche interest.
Having said all this, just looking at the numbers in the current market in the Macarthur area, it looks as if auctions might only be the right option for a select few properties. In most suburbs an overwhelming majority of properties - in most cases over 90% - is sold by private treaty rather than at auction.
Out of 106 properties sold in Campbelltown this year, six were sold at auction and three were sold prior to auction. It is also interesting to look at the properties that went to auction, because out of the 20 properties that went to auction, eight were “passed in” (or not sold when buyers fail to reach the owner’s reserve price) in Campbelltown during the same period while three were withdrawn.
In Ingleburn, the numbers look even bleaker. Out of 120 properties sold this year, one was sold at auction and three prior to auction. Of the 11 properties that went to auction, seven were passed in.
Unsurprisingly, most of Prudential Real Estate's sales in the Macarthur area are by private treaty. This does not mean that we don't auction houses as well. And for Prudential Real Estate in Liverpool, the auction is the preferred method of sale. This is partly to do with the market in Liverpool being slightly more in favour of auctions. Here, out of 101 property sales, 18 were sold at auction, one after and four prior to auction. If you're looking to sell in the Liverpool area, please contact Simon Perri for advice.
Wherever you're planning to sell a property, if you have any question regarding the best method for selling your property, please do not hesitate to contact your local Prudential Real Estate office or sign up for a free market appraisal and we will happily answer all your questions regarding the value of your property.