It goes without saying that selling a property makes the list of life’s most ambitious tasks.
There’s a lot that goes into putting your home on the market and it’s a lot more intense than a stroll in the park. One of the biggest decisions you’ll need to consider is whether you want to sell your home privately or at an auction. Both have their advantages, and depending on which one you go with, you could end up with entirely different results.
So which do you choose? There’s no easy answer to this, but I’ve done the hard work for you and made a list of all the pros and cons to help you decide on the best solution for you and your home.
Creating heightened demand: One of the biggest advantages to putting your house up for sale on auction is that you can build excitement surrounding the event. Having a sensational marketing campaign leading up to the day is going to create serious appeal for your property and subsequently encourage potential buyers to do what they do best: buy, buy, buy!
Protection from losses: If it just so happens that things don’t go according to plan and those attending aren’t feeling particularly committal, you won’t end up worse off for it. Luckily, a reserve price is put in place to ensure that you don’t come out an auction utterly disappointed. Maybe the weather the awful, perhaps your agent fell short with marketing, or maybe lady luck was off attending someone else’s auction. Regardless of the reasons behind it, if you don’t get what you’re after then you can rekindle your chances of a successful private sale instead.
Winning is everything: When it comes to bidding over a crowd-pleasing property, competition can get particularly fierce. This is especially true of homes in trendy, attractive, or up and coming suburbs, and can often result in remarkably higher sales than originally expected. If your home is particularly marketable or if a popular area, you will likely do well to opt for an auction.
You make the rules: Another nifty feature of going down the auction route, is that you are in a position to set your own terms of sale. For instance, if you’re especially confident in the sellability of your home, you can prohibit the option for a cooling off period. Auctions can give you more control over the sales process and is why many people prefer the process to private sales.
Expenses: Due to the necessity of having an exceptional marketing campaign and the need to find an expert auctioneer, you will more than likely be required to shell out some big bucks for the privilege. It usually far cheaper to opt for a private sale, yet the outcome of an auction may bring you a bigger return on investment. Basically it’s just one big old gamble.
Financial conditions: Since auctions come with a prerequisite of finality (or as I like to say, ‘no take-sies back-sies’), it is generally expected that the successful buyer has the means to buy the property. After all, that’s why they bid on it, right? The issue here is whether or not that buyer is subject to finance, and since it may be the case that they are not, then their offer may be automatically rejected.
Auctions aren’t for everyone: There are always going to be situations where an auction is not likely to bring you the kind of fortuitous, pop-the-champagne outcome that you might have been hoping for. If your property is not particularly alluring or in an especially sought-after area for example, auctioning might not be your best option. Or for instance, if your home is one of 7 other apartments selling in the same complex, then it’s not likely that bidders will go above the advertised price which is likely plastered all over the ‘generic-realestate.com’.
Just relax: Private sales are nowhere near as fast paced, stress-inducing, or high-octane as auctions, so you can afford to take a deep breath and unwind a little. You’ll find that you’re more free to take your time and think things over when your not expected to make a successful sale in the space of one singular event. This way you can allow for sales that might take a little longer due to a buyer’s subject to finance, or if you don’t mind an extended settlement period.
It’s all up to you: One of the biggest luxuries of having a private sale, is that you get to call the shots. You can decide on when, or even if, you want to have open inspections, whether you want to advertise the price or not, or take a low key marketing route.
Save big: This is a big reason why many people opt for private sales. The cost of marketing for an auction alone is substantial to say the least, so you can rest assured that you won’t be sacrificing a huge chunk of your budget if you decide on selling privately. On the other hand, since you won’t be shouting this information from the rooftops, you’re going to want a very strategic marketing campaign in place, otherwise you may not get enough exposure.
Cooling off period: Now this doesn’t always end up being a problem, however, there is always the chance that whoever decided to purchase your property is now having second thoughts. Depending on the state your in different cooling off time frames apply. In Victoria you have three days after signing a contract in which to mull over your decisions… So just cross your fingers and hope your buyer isn’t getting a case of buyer’s remorse.
Time to seal the deal: The benefit of having more time to finalise a sale can also be a curse as there really isn’t any fixed time frame. It’s not going to matter if you wanted to have your house sold within the month, it could take several. All you can do is ensure that you have a good agent that has a fool-proof marketing plan.
Expect to haggle: The last main issue that comes with private sales is that instead of having a whole crowd of people willing to pay more than was advertised, you’ll likely be plagued with offers well below your advertised price. However, if you’re aware of this beforehand, you can mitigate this by ensuring you don’t list your property for a price you wouldn’t be willing to accept. This way, even if a potential buyer tried to bargain down the price, it might still be an offer worth considering.