Sale by Private Treaty vs. Sale by Auction.
What's the difference?
Asked on Jul 29 2013,
Selling in Beccles |
The two approaches to selling property are significantly different.
The private treaty strategy is to price to attract attention and generate viewing activity, generally starting the process at the highest possible anticipated price point and should this fail to entice offers the process is to reduce and re-marketing and keep doing this until an acceptable offer is made. Once an offer is made and accepted the offer is subject to contract and survey, meaning that if any issues arise such as survey defect the buyer will usually seek to renegotiate or possibly withdraw from the purchase. In summary a high degree of uncertainty prevails up to the point contracts exchange.
Conversely, the pricing strategy when selling by auction is bottom up with key elements being the 'reserve' which is the price below which the vendor will not sell and the 'guide price' being a steer to buyers thinking of bidding. Potential buyers are required to have completed their due diligence and secured financial arrangements prior to the day of the auction, this means that when they bid they know what they are buying. The ideal scenario for the auctioneer on the day of the auction is to have a competitive bidding from multiple potential buyers, this competition element often sees sellers reserve prices met and surpassed.
Web reference: http://www.auctionhouse.uk.net
Answered on Jul 29 2013,
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