The Pros and Cons of Auction Versus Private Treaty

You may be trying to decide between auction and private treaty. Evaluating the pros and cons of each of them based on your particular situation can help you to clearly see which one would work to your advantage.

Private Treaty

With a private treaty, you complete a typical residential property sale. You decide how much you would like to get for your home and you work with an agent to help you generate a buyer. They can give you a counter-offer and if you decide to accept, then the documents are completed to create the sale.
You have all the room you need to negotiate the terms of the sale. The buyer can also subject the overall sale to conditions such as being approved for a loan or the home passing an inspection by a professional. You can change the price of your home at any time too if it has been on the market for some time, but not selling. You also get to select the real estate agent you work with. It can take more time to sell your home with a private treaty than it will with an auction though. You may have to let several different people come into your home to inspect it and to decide if the home may be right for them. You may end up accepting less for the home than you really wanted in order to generate a sale.

Auction

With an auction, a set time and location is offered for the sale. Those who are interested show up and place a bid. The bidding continues and the highest bidder gets the ownership. This is an exciting way to sell a home in very little time. You can set a reserve price which means you won’t accept less than a given amount for the sale of your home. It can be more expensive though to sell your home through an auction due to the advertising involved. If the property doesn’t sell, you still have an obligation to pay for that advertising to the provider.