Selling Your House: Private Or By Auction

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Selling Your House: Private or by Auction

Selling your home private or at auction, like any other action, has its pros and cons. When deciding which one is the right route for your home, you’ll need to consider both the lengths of the lists and the weight of each item on it. Start contemplating with the list below:

Pros of Private Treaty

Interested Parties

When you sell your home and list it on the housing market, things happen more organically than with an auction. Realtors only bring potential buyers through who are interested in your type of property, so you get quality exposure over quantity. Only listing your house for private sale makes sure that uninterested or unqualified buyers don’t waste your precious time.

Flexibility

With private treaties, you get the flexibility to work with your buyers (or with the sellers as buyers). You two can communicate and decide on a fair price, any contingencies, and work that needs to be done. Just be sure to get a good realtor you look forward to working with.

Fixed Price

Though the reality in the still-recovering housing market has been a little shaky, private sale owners get to be strict on price. When you put your house up for auction, you have a reserve price (a starting point) that is generally lower than you’d like to accept. With a private treaty, you can refuse offers that are too low.

With private treaties, you can make counter offers until you find a middle point. Say you found a family who you would really like to see in your house, but their offer was too low. You can come back with a higher offer and negotiate until you both feel comfortable.

Cons of Private Treaty

Speed of Sale and Lack of Urgency

If your local market is saturated or it’s not the right financial time to buy for local buyers, your house could sit on the market for a long time. This has an exponential effect. The longer the house is available, the less attractive it becomes. Instead of buyers seeing it as their dream house, they think of it as something they can come back to if they don’t find anything else.

As the house sits on the market, buyers will expect you are willing to lower the price. They see the length of the listing as desperation and will prolong the process by waiting for the price to go down.

Pros of Selling at Auction

Reserve Price

By setting your home up for auction, you’ll receive a reserve price from the company. This is a base price calculated from what other homes have sold for in your area. It acts to give the bidders a starting place, but also protects the sellers. You won’t have to accept anything below the reserve price.

Fast Sale

Compared to the lengthy treaty process and listing your home with a company, auctions are a dream. Your house can sell as little as a week after contacting an auction house company.(depending on their availability). Bid-based offers go through much quicker than private treaties.

You Set the Terms

Sometimes the hardest part of selling a house is getting buyers to see past its issues. Every house has them, but they also have their positive points. It’s hard to get buyers to look past the bad and see the good.

This is true for private sales, but not with auction houses. The buyers bid on the house as is. You don’t have to go back and forth with offers and counteroffers to pay for any needed repairs. The house’s issues are the bidder’s problem now.

No Staging

If you have ever sold a house while you’re still living in it, you know what a pain showings are. Getting the kids to clean their rooms or finding somewhere to be at a realtors whim is hard. With auction sales none of that matters. You let bidders walk through the day off, then go back to living your life (until you start packing!)

Cons of Selling at Auction

Can’t Guarantee an Audience

One of the hardest things to predict when you’re doing an auction is the interest of the public. Will buyers be interested enough in your home to get up on your auction’s morning? There’s just no way to know how many to expect. If you get a large crowd, that’s great! But you run the risk of a small attendance with low highest bids.

Competition

The other houses up for auction at the time of yours ties into buyer attendance. If you live in a low-value market and many other people are selling, your home will need to stand out. Do your research and look into the market before you decide on an auction.

You can ask your local auction house when home sellers have the best success. Their suggestions will have seasons, experience, and current market trends in mind.

When it comes down to it, no one can tell you what the right choice is for listing your house. It depends on your values, priorities, and financial situation. If you want to sell your house super fast, take the auction route. If you want to get the best price and feel comfortable with the transfer of property, do a private treaty. We can’t tell you what to decide, however we can help when it’s time to mortgage your new home. 

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