With The Block regularly drawing in between 1.3 and 1.7 million viewers an episode, it’s safe to say the popularity of home renovation isn’t on the wane.
The Block suggests with some DIY renovation and interior decorating, you too can achieve a record price for your home at auction.
But according to Domain The Block isn’t really a realistic view of how an auction runs:
“Like most of reality television, the screen-time version is a skewed version of real life. Strip back The Block branding and the outcome would have been entirely different.”
So is auction really the best way to go to sell your house? We take a look at the pros and cons of auction vs private sale, and which can secure the best price for your property.
Using Auction to Sell Your Property
If you’re selling in Melbourne and Sydney your agent may suggest putting your property up for auction, as these cities both have strong market conditions.
To get a feel if the market is right for auction keep an eye on the clearance rates. Over 80% auction clearance rates indicate very strong conditions:
- 70-80% is strong,
- 60-70% is moderate and
- below 60% is slow.
The beauty of selling at auction is that it creates urgency and forces buyers to make a decision on a certain day at a certain time. The process isn’t dragged out like with a private sale. Even if the property is passed in, a good real estate agent can usually negotiate the price up if there’s an interested buyer.
One risk of selling a house at auction is getting the reserve price wrong. Once the reserve is met, the property is ‘on the market’ so the reserve price needs to be high enough to get you a comfortable amount. But not too high that it puts bidders off.
However, if the market conditions are right and there is high buyer demand, then selling at auction can be very profitable venture. Maybe not as profitable as The Block, but more so than if you were selling by private sale.
Using Private Sale to Sell Your House
Even though you may dream of an exciting auction for your home like on The Block, it may not be the best route to take. Auctions can be stressful and costly, and you may not get you the price you want.
Says investment property expert Wendy Chamberlain “Certain areas and even certain properties within an area will achieve a better result when sold via private sale versus via auction”.
She suggests that private sale may suit sellers that aren’t in a particular rush to sell and that it can offer flexibility if the seller wishes to take their time selecting a buyer.
Private sale can also be a quicker process. An auction campaign usually runs for up to 4 weeks in total, whereas an interested buyer can make an immediate offer with a private sale.
Other pros of conducting a private sale include:
- Privacy - a big plus for sellers who want to keep their home out of the public eye
- Less cost - you’re not paying for an auctioneer
- Attracting genuine buyers - rather than nosey neighbours.
Whether considering selling a house by auction or private sale, it comes down to your own personal choice and comfort level at the end of the day. Finding a confident, quality real estate agent through Bricks+Agent, who knows the local area and market, can help you achieve the best sale price with whichever option you go with.
If you’ve found these insights helpful then be sure to sign up to our monthly newsletter below. We’ve got lots more tips and tricks to help you sell your house!