Private Treaty or Auction – A Comparison

Sale By Private Treaty

Sale By Private Treaty

The 2 most common methods of selling a property are either by auction or through private treaty sale. In the case of an auction market determines the price, but in case of private treaty sale, the buyer and seller have to mutually arrive at fair market value, to close the sale.

There are advocates of both methods and to see through the mist let us discuss merits and demerits of both.

  1. 1.   You are a better judge!


If your property has some unique features and you are finding it difficult to find a price to it, then go for auction, advertise the features well and let the market decide the price through auction.


  1. 2.   Do you have the time or want a quick sale?


If you want a quick sale, as you may need money for your next buy or you may be moving to a new place and want to close the deal fast, and then go for auction. It is time bound process that makes the buyer offer the best price to get the deal.


But, if you have a property and want to test the price that it can fetch, going the private treaty way is better. This way you can interact with many prospective buyers on one to one basis and find out the deal that works best for you.


  1. 3.   Is you house is in demand? Let market decide


If your property is in sought after area, and there is good buying interest, then auction can be a better path to get a favorable price. However, if it is just another common neighborhood property, then private treaty route is better.


  1. 4.   Emotions Vs negotiation – Choose the one


In the case of sale through auction or private treaty the buyer behaves in entirely different way. In a private treaty sale, once offered a price the buyer always try to negotiate for a lower rate. But in case of auction, the buyer is given a reserve price, and he has to bid for it among other interested parties. If he is in love with the property, he will have to outbid others. So in auction it is more of emotions. The seller is required to prejudge what works best in his case to get the best price.


  1. 5.   Are you secretive on deal?


Auction is relatively and open process, when lot many people come to know the final value of the deal. In the case of high end properties, usually both buyers and sellers may not want to make public the details of the deal. In such a case selling through private treaty route is a better option to auction.


  1. 6.   The cost of the sale also matters.


An auction requires help of an auctioning agent and need to have an auction campaign and it all costs money. The private treaty Sale by Auctionsale can be done through word of mouth publicity or by directly talking to the interested parties. If your property is an averaged price one, then the cost of the auction may not be justifiable, in such a case selling through private treaty method is better.


We are sure that the article will surely help you to choose what is best to sell your property, Auction or Private Treaty!

Ashuli Jain


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