Buying A Property Via Private Treaty or Auction: Which is Better?

If you’re reading this article, then it is more likely than not that you’re looking to enter the property ladder or become an investor. 

Becoming a homeowner or investor is a very exciting time. However, it can also be difficult to know where to begin.

Do you start looking at private sales, or should you spend time finding where local property auctions are being held?

Well, don’t worry! Perth’s top-rated property settlement agency is here to help. KDD Conveyancing is a settlement agency built on 27 years of conveyancing knowledge and experience.

It is with that in mind that we’ve put together this helpful guide to help you make the most informed decision for your needs.

Is An Auction Or Private Treaty Better?

There is no “one size fits all” answer to this question, as we believe there are several factors you’ll first need to consider, such as your personal preferences, current market conditions and your financial situation.

To help with your decision, we have listed an easy-to-understand breakdown of purchasing a property using either method, so you have the best answer for your needs.

Buying a Property by Public Treaty

• The ability to negotiate: Buying your property through a private treaty means you can negotiate directly with the property seller or their agent. This can provide more flexibility in terms of price and the conditions of sale.
• There will be less pressure: With a property auction, you’ll be pressured to make a snap decision, but as there aren’t usually immediate deadlines with private treaties, you can take your time. 
• Giving you more time before committing: Generally speaking, a private treaty will give buyers more time up their sleeves to conduct due diligence, such as inspections and financial arrangements, before committing to buying a property. 
• Lower price potential: A property seller will be open to negotiating the property price in a private treaty sale, whereas auctions work on an entirely different pricing model that creates a degree of uncertainty over the end sale price.

Buying a Property Through an Auction

• Greater transparency: An auction provides sellers with more transparency in terms of pricing, as all interested buyers will bid openly. This will also give you a clearer idea of the property’s market value.
• A faster process: In our experience, auctions are typically faster than buying a property through a private treaty. Auctions provide you with a set timeframe for the sale. This can be very convenient if you want to speed things up in the buying process.
• More competition: An auction can create a sense of urgency and competition amongst potential buyers, which, in turn, may drive the price of the property up.

Private Treaty Vs Auction: Additional Considerations for Your Decision-Making

At KDD Conveyancing, we believe that the best option for buying property in Western Australia is the one that best suits your situation and needs. 

To remove any confusion, we have put together this list of additional conditions for your convenience: 

• Market Conditions: When the market is hot and the demand is high, property auctions may be more frequent and advantageous for prospective homeowners looking to enter the property ladder. When the market is slower, it stands to reason that many sellers will opt for a private treaty sale. 
• Your Financial Situation: If you need more time to secure financing, a private treaty sale might be the best way for you to go. An auction could be a more suitable option for those with ducks in a row.
• Your Risk Tolerance: We are going to state the obvious here. Property auctions are stressful. They also involve more uncertainty, especially if you’re competing with other buyers. Private treaty sales take away much of this pressure.

We hope this article has helped unpack the private treaty vs. property auction comparison so that you can make the best decision for your needs right now.

Regardless of which method you decide is best for you, we must stress the importance of thoroughly researching each property, getting to learn the current market conditions in Perth, and considering seeking advice from either real estate professionals or financial advisors before making your decision.

Contact Us Today

When you have found your perfect home, we are the settlement agents who will be right here to guide you through your contract. 

If you would like to have a chat to understand our residential settlement processes better, why not contact our friendly team at KDD Conveyancing today? 

If you’re looking to learn more about property settlement or conveyancing or you would like to learn more about the WA property industry, then don’t forget to check out our blog for more insights.

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