Which Selling Method Should You Choose?

It can be hard to know which auction method is right for you and your home
Photo: Sandra Cohen-Rose

Is auctioning your house the best way to sell?  Or should you consider selling privately ? 

Although auctions as a selling method are gaining popularity in the Melbourne housing market, the fact remains that private sales are much more common.

According to RP Data, approximately 30.6 per cent of sales from January 2013 until November 2013 were by auction, compared to only 21 per cent in 2012.

Changeover Buyers Trying to Acquire and Sell Houses at the Same Time

If you are considering putting your property on the market either to upgrade or downsize, then you are in good company. 

Changeover buyers have recently dominated the auction market in Melbourne, with the implication that many are also looking to sell their own property at the same time in order to finance their new purchase. 

Arguably one of the most important decisions in the whole selling process is the method you employ to find your buyer.

The Pros and Cons of Auctioning Your House

This method is seen as a great way to sell in a rising market and for urban locations. Vendors are more likely to favour this approach when house prices are growing and supply is tightening.

Selling via auction creates a sense of urgency as well as a competitive environment in which interested buyers can bid earnestly for the property.    

“Arguably one of the most important decisions in the whole selling process is the method you employ to find your buyer.”

Strong competition can certainly play a big part in pushing up the final sale price, as noted by experienced buyer’s advocate Cate Bakos.

In terms of disadvantages, it is said that potential buyers might be put off by the idea of competing in an auction.  Additionally, this approach is less prevalent outside metropolitan areas where demand tends to be lower.

The Merits of Privately Selling Your House

A private sale is a less daunting process for some buyers, as it involves setting an asking price or requesting offers from those interested in the property. 

A private sale is often seen as simpler and much easier to understand. However, the lack of a deadline means it may not be suitable if you want to sell your house fast or place some urgency on the sale.

“Irrespective of your preferred approach, it is vital that professionals are engaged to ensure a smooth process.”

This may not be much of an issue if the market remains as strong as it did last year, when the average time on market (for a private sale) was just 38 days.

Set Date Method Provides More Urgency

Under this method, you set the price range for your property and the date by which formal offers from potential buyers must be submitted. 

The sense of urgency created makes the set date approach suitable in a slower market where a private sale is suited.

Thinking of Selling Your House Yourself?

Each method above is governed by strict laws for the protection of all parties. For example, there are rules regarding how an auction needs to be conducted and how attendees need to behave; private sales also require appropriate sale contracts to be drawn up and executed in order for the documents to be valid.  

Irrespective of your preferred approach, it is vital that professionals are engaged to ensure a smooth process.