When the time comes to sell your home and move to bigger digs, there are a lot of things to think about. Timing is everything and managing the financial aspects of the process can be tricky. You could set aside an evening and research the ‘how to’ online yourself, or you could kick things off with an appraisal of your current property from your friendly local real estate agent.
The appraisal process has a few advantages. It will give you an idea of what your property is worth and it will also update you on the current state of the local market. Getting informed, up-to-date advice about this is crucial – you may discover the timing is perfect and then jump into a hot market and have a quick and successful sale with a great result. Alternatively, you may discover things are moving a little slowly, or that compared to other properties currently available yours is a little tired and could do with some renovations. An appraisal figure that is less than your expectations can give you some perspective on selling now or value adding to get a better price later.
As well as getting a general sense of what your property is currently worth, an appraisal may also inform your decision on how to sell. If you are upsizing to something bigger, obviously you want to get the best price possible when selling your property. There is no broad and clear distinction as to whether a better price can be achieved through an Auction or a Private Treaty (for sale), but the decision to choose one over the other will come down to a few factors.
There is always a conversation about the best time of year to sell – seasonal preferences may come into it, or local major events that can affect the result of a sale one way or the other. If your property is inclined to be dark and cold, then trying to sell at auction on a rainy day in winter is madness. Similarly, selling your beach house via private sale in summer when all the other properties nearby are getting bumper prices at auction make no sense.
The first consideration where timing is concerned is your personal urgency to sell. If there is a new baby coming, or you have already found a new property to move into then when to sell may be out of your hands. In this case you would get some advice about what the sales trend has been recently and let that inform your choice. If you are in no hurry, it may be better to wait, renovate and jump back in when the market’s better and your preferred sales method will have a better chance of success.
2. Pricing Needs
Regardless of how the property is to be sold, the price points should be carefully considered and the best sales method for your desired outcome selected. If your priority is quickly getting into your new property, maximising price, and you need clearly defined timeline, then Auction could be the perfect choice. However, if Auction would be an unusual choice in your location, you have more time, or are simply more comfortable with setting a price, Private Treaty is the way for you. A word of caution however; in both cases a reserve price or a sale price must be set and this should be done with careful consideration. Remember the price could go higher at an auction with strong competition, but it will only be negotiated down from your starting price through a private sale (and if you start too high, you may ultimately sell for a lot less).
3. Personal Risk
Selling your property is about balancing risk. The choice to sell at Auction or via Private Treaty, for many comes down to the level of personal risk they are willing to assume. On the plus side, the competitive energy of an auction can push the price up through feverish bidding, though the fear for some is that the outcome is uncertain. That competition can only exist with a strong turn out on auction day and anything from poor marketing to bad weather can impact on this. Great marketing, glorious weather and a huge turnout to auction in a strong market can deliver you one of the best Saturdays of your life!
On the other hand, a private sale offers clear and definable terms, but if pricing is not managed well it can have a detrimental effect. An overpriced home may take longer to sell – if it sells at all – and an under-priced home in a buyers’ market can get snatched up fast, barely achieving its actual market value.
There are many pros and cons to both and sifting through all the options can feel a little like you’re a dog chasing its tail. The most important thing is to consider conditions carefully and then make the decision you are sure you can live with. Starting with a property appraisal will at least get the ball rolling and brief you on all the latest need to know details.
Have you chosen Auction and Private Treaty under different circumstances when you’ve sold in the past? What was your experience?