16 October 2020

Auction or Private Treaty – Which is Best?

When selling your home, there are a lot of decisions to be made that can have a critical impact on your final outcome. One of these is knowing which method of sale is going to achieve the best price for your home. Whilst you can be guided by your selling agent, it’s always a good idea to do your own research.

There are a variety of ways you can offer your property for sale, however in the Sydney market and Sutherland Shire in particular, Auction & Private Treaty sale are the most common.

We outline the pros & cons of each.

Selling via private treaty

A standard residential property transaction is known as a Private Treaty sale. This is when you set the price you’d like your house to sell for, and your real estate agent negotiates individually with prospective buyers to achieve a sale as close to this price as possible.


  • Greater flexibility for negotiation due to a cooling off period. Selling with a cooling off period allows for a contract to be entered into quickly so the buyer can secure the property and carry out their due diligence afterwards, ie  building inspection or finance approval.
  • There’s more flexibility regarding the length of time your home is listed for sale: unlike an auction, you are not working towards one specific date.
  • More opportunity for a quick sale.
  • Cost savings on the Auctioneer.


  • It may take longer to sell your home compared to an Auction campaign.
  • You might need to make your home available to prospective buyers for frequent private viewings.
  • If you or your agent choose to set the price too high, your property risks becoming stale and overexposed to the market resulting in a substantial loss. Once a property has been on the market for too long buyers tend to lose interest. It creates a perception that something is wrong with the property.
  • If your agent sets a price too low, you risk underselling the property.
  • There is no sense of urgency. The private treaty method is an open-ended process with no certainty as to how long it will take for the property to sell.

Selling via Auction

An Auction is when prospective buyers who have inspected the property over the preceding 3-4 weeks, gather to bid on your property. The highest bidder at the end of the Auction becomes the successful purchaser, provided the bid matches or exceeds your reserve price.


  • An Auction is a three part process where you have the opportunity to sell before Auction, on the day of Auction, or in the event the property is passed in, directly after the Auction.
  • You set a reserve price (minimum you’re prepared to accept) and a settlement date to suit you.
  • Auctions are a great way to create competition amongst genuine buyers and it only takes two interested parties to drive the price up in a bidding war. In some cases, this could lead to hundreds of thousands of dollars above your original expectation.
  • There is no cooling off period with an Auction. It is an unconditional sale where the purchaser cannot rescind without severe penalties including forfeit of their deposit.
  • Open homes are twice weekly and at dedicated times so you know what to plan for.
  • The Auction process by its very nature creates a sense of urgency. Buyers have a definite time frame in which they must act, which puts you in the driver’s seat.
  • A set auction date brings the sales process to a closure and allows you to plan for the future.


  • Some vendors find the process extremely stressful.
  • On Auction Day you may feel pressure to reduce your reserve price in order to make the sale.
  • The Auction process is about getting as many people through the home as possible which may not suit private people.

So now that you know the pros and cons of each selling method, have you decided which one is right for you? Let us help you with this decision. Contact the team at djw property today on 9544 9688.