Auction or Private Sale: Which Is Better?

June 30, 2022

Selling your home is a big decision, but even after you choose to put your home on the market you still need to decide on the best approach.

There are two roads you can choose to sell your home:

  1. Auction 
  2. Private sale

Both these options are very different and may have different results, not just for your property price, but also for the terms of sale, selling costs and the time it takes to sell your home.

Understanding these differences and what is involved is really important for getting the best result for what you need. Make sure you have your selling goals outlined early so you can discuss these as part of your selling conditions with your potential real estate agents. That way you can come up with the best possible outcomes together, taking everything into account. 

The big deciding factors are any timelines you are under, so if for example you have already signed a contract on your next property and need to settle by a certain date, as well as any financial goals you need to have met to cover your debts.

What is the difference between auction and private sale?

Auctions are much more dramatic, noisy and public ways of selling property. There is a lot of tense emotion and things move at a rapid pace. For this reason, you are most likely to see auctions showcased in reality TV home makeover shows. 

Each state has its own governing rules about how auctions must be conducted with a lot of emphasis on fair and transparent sales.

Like private sales, an action is handled by a licensed real estate agent who will appoint a professional auctioneer to attend your property on auction day to oversee and call the bidding. While you can opt to conduct the auction at the real estate office, usually the auction is held on-site.

All your property documents must be on display prior to the auction and usually, bidders have one last look through the property before the auction begins.

During this brief bidding time, which can be as short as 60 seconds or as long as ten minutes, registered bidders will bid in increments until no more bids are made.

Bidders can open the bidding at any amount but the sale itself is not considered official until the seller’s reserve price (lowest possible selling price) has been met.

A private sale is the traditional and widely popular home sale method. In this case, a real estate agent will discuss a viable property price with you and advertise this as part of the property listing. They will arrange to have comparable rates shown for similar property sales to justify their asking price. As soon as the property is listed, anyone interested can put forward an offer to the agent who will pass it on to the seller for their consideration. 

With a private sale, some properties come with a set price while others will be inside a price bracket. It is not unusual for offers to be made above the higher bracket to secure a sale for a property in high demand. It’s up to the owner to check over applications and choose the offer they consider to be most advantageous. This can take into account a number of factors outside sale price including settlement terms, cash deposits, and cash sales—no finance required (or pre-approved finance only).

You may also hear a private sale referred to as a private treaty, there is no difference between the two.

There are a number of subcategories under these different sales methods including Openn Negotiation—which are private sales auctioned online, off-market sales, expression of interest, for sale by owner and private auctions, but typically it’s auction and private sales that are the two most successful, and popular choices for home sales in Australia.

How do you decide which selling method is right for your home?

The best person to talk to about your options is a qualified and experienced local real estate agent. Before you sign on with an agent, take the time to get to know them and their sales procedures as well as the costs. They’ll discuss your options as well as evaluate what the expected sales price will be for your property.

A real estate agent can discuss what has worked well in your local area in the past, as well as what is going to be most successful for your property.

While there are a number of factors you’ll want to take into account, the two biggest are location and property type.


The auction capitals in Australia are Sydney and Melbourne. Most properties go to auction in these greater regions with phenomenal success because demand and competition are already high. Other state capitals as well as most regional and rural properties tend to do better in private sales because people have more time to discuss sales criteria, and prices and start negotiations.

Property Type

The best properties for auction are those that are in high demand. The more competition and more interested buyers, the more likely a bidding war will take place, driving up prices and netting owners a great result. Properties that are in short supply, have unique attractive features and that appeal to a wide range of buyers are great for auction.

Who is your property suited for?

  • First home buyers
  • Families
  • Investors
  • Short-term holiday stays
  • Downsizers
  • Upsizers

If your home is appealing to three or more different buying groups, an auction will be a great way to allow bidders to see other bids and choose how to respond in a fast and high-pressure environment.

What are the Pros and Cons of Private Sales and Property Auctions?

Making the decision about how to sell your home isn’t one you need to face alone. Your real estate agent can assess your property features, compare it to other homes they have sold in the local area and help you make a decision based on current successful sales. It’s okay to take your time to decide which way to go and ask the agent questions that help you take into account all the associated pros and cons.

Selling at Auction

The rapid pace and uncertainty of an auction are not for everyone. A month of marketing campaigns comes down to ten to 20 minutes of haggling where you have no idea what the outcome will be. While it’s not for the faint-hearted, trusting in the expertise of your real estate agent and auctioneer will help calm your nerves. Also, be sure to discuss what happens next if your auction is passed in so you understand the overall time frames you may be facing for your property sale. 

Auction Pros

  • You can get a significantly higher price than first expected
  • Auctions are specifically structured to create urgency and competition among bidders, driving the price up and encouraging fear of missing out.
  • There’s no cooling-off period. Contracts are signed at the point of sale and a 10% non-refundable deposit is taken then and there, so you know your price and sale are locked in.
  • The buyer sets the reserve price, making sure they get the price they want or there is no sale - even then, private negotiations can begin immediately after the auction with the seller and the highest bidder.

Auction Cons

  • Stressful for both parties. It’s not just stressful for you as the buyer, it can be overwhelming and stressful for novice bidders too. That might mean a lot of your potential buyers are scared off or too shy to make a bid.
  • You’ll get a lot of non-genuine interest. Auctions attract stickybeaks, curious neighbours and those doing buying/selling research who aren’t interested in making a bid.
  • You’ll have to wait out the full cycle. Most auctions take place 4 weeks after a home is advertised on the market - which might leave you open to changes in property prices due to interest rate hikes.
  • Hiring an auctioneer can significantly increase your selling costs

You can get around some of these issues by adding “unless sold prior” to your auction terms. This gives sellers the ability to take an attractive offer at any stage of the property sale, instead of waiting for the bidding to begin. This also allows buyers who don’t want to be involved in the auction a chance to make a high offer to take the property off the market. 

Selling via Private Sale

Offering a home for private sale can achieve quicker results, especially if your property type is in demand. It’s possible to sell in days from listing in a hot market which makes it a great choice for those on a tight time schedule.

With a private sale, anyone interested in your home can make an immediate offer and enter into the negotiation process with you.

It’s appealing because sellers get a lot more choice over who they sell to and under what conditions.

Private Sale Pros

  • Sellers can take as much time as they like to view applications and offers and decide whether to accept 
  • It’s a less stressful selling option as you have more control and choice and can determine where the finish line is
  • Offers more privacy than an auction – where the final number is public knowledge
  • Can be a cheaper way to sell

Private Sale Cons

  • The slower pace may mean you lose interested buyers to other properties
  • The cooling-off period gives buyers time to change their mind
  • There might not be a lot of competition as buyers can’t see who else is involved or what other offers are
  • Your property may be on the market for some time, even months, if the right amount of interest isn’t generated

You can counter these difficulties with Openn Negotiation which allows you to sell your property online - but under private sale rules. Bidding can start online as soon as the property goes to market. You can bring the auction date forward at any time as well as well at any time to any offer that comes in. 

You can also increase your audience with an online sale as interstate as well as international bidders are welcome and all transactions and signatures can be obtained electronically, as well as E-conveyancing, to make the transaction smooth and seamless.

When making the decision on how to sell your home make sure you feel confident and comfortable with your choice. Talking to your real estate agent in-depth about your choice, and what happens long-term if the sale doesn’t go as planned, will help you understand the processes and make a solid decision that will work out for your needs.

In a shifting market, you want to make sure you get the best professional advice to steer you through an emotional and challenging process. 

Interview all your property professionals carefully to make sure you like who they are and what they do, from your real estate agent and banker through to your conveyancer, you need to have experts on hand you can trust to assist and support your property sale.

Who is Peta Stewart?

Award-winning conveyancer. Entrepreneur. Business mentor. Women’s cycling advocate. These are just some of the ways Peta Stewart is introduced. What ties them together is a steely determination to help people achieve their life goals and have fun in the process.

In 2004, Peta became the first licensed conveyancer in the Albury Wodonga greater region. Five years later, she launched her own business and started shaking up the industry with a good dose of personality, integrity and humanity.

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