If you're selling your home in Mount Eliza, you'll be confronted with some big decisions: do you buy a new home before selling your current one? Which agency do you work with? How much do you want to set as an asking price? But perhaps one of the most important decisions is how you'll sell your home.
Private sale or auction: it's a choice that every vendor has to make. Here's what you need to know – and a few facts that might affect your decision.
What is private sale?
Private sale is far and away the most popular method of sale for property across Australia. You might find one or two places that have a majority auction market, but CoreLogic RP Data tells us that by and large, people prefer to go to the negotiation table than to the auction block.
It's more of a measured sales process, where a vendor will field multiple offers from multiple buyers, deciding on which they would like to go with and perhaps fielding some counter-offers along the way. Once everybody is happy, with negotiations usually going through the sales agent and buyers agent, the contract is signed and voila: you've sold your home.
What about auctions?
However, in some places in Australia – especially Melbourne – auction is a very popular form of sale. CoreLogic reports that about three in 10 homes are sold via auction in our state's capital, with only Canberra houses following just behind in terms of auction popularity.
Auctions are designed to take advantage of the emotional side of property buying. That is, pitting buyers against each other, relying on competition and the mad dash to win that one home that supposedly can push a vendor's sale price well above what they expected.
Sometimes it works! CoreLogic says that the median price for an auctioned home in Melbourne is about $835,000, while a private sale achieved just under $500,000. That might scream to you that an auction is always best.
Which sales method should you choose?
We rely on the Nobel Prize-winning method developed by William Vickery: the silent offer via private sale.
However, while some agents say that an auction is a sure-fire way to get the best price for a property, we argue differently here at Hall & Hall.
There's no doubt that an open-cry auction can get a high price, but the question is whether it can get the highest one. We've spoken to a number of buyer's agents about this very subject, and we've discovered something interesting: a lot of the time, the buyer's agents are walking away from auctions where they are successful with money left on the table. That is, they aren't spending as much as they could have done on behalf of their clients.
Furthermore, that difference in achieved price in Melbourne doesn't mean auctions get better prices, but could be that higher-priced properties tend to go to auction more often than a private sale!
That's why we rely on the Nobel Prize-winning method developed by William Vickery: the silent offer via private sale. This way, buyers must offer their highest price without being influenced by other people, meaning sellers don't miss out from money being left on the table, and buyers don't get swept up in the moment and bid more than they can afford.
Auctions can be a great and popular method, but here on the Mornington Peninsula, we know that private sale often offers a better result for everybody involved. If you're interested in working with the local experts that know how to get the best price for your property, get in touch with the team at Hall & Hall today.