In Sydney and Melbourne, the majority of properties sell via the auction process. However, around the country, private treaty sales are a far more common way of selling a property.

An auction is a sale held at a certain place, time and date, after a marketing campaign. Whereas a private treaty sale is simply a negotiation between both parties, usually done with the help of a sales agent on behalf of the vendor.

‍

Auctions

‍

The main difference to note with an auction is that it is an unconditional sale at the time the hammer drops. That means you will need to have all inspections such as building and pest, completed prior to auction.

There is also no cooling off period for a property sold at auction. Each property will come with its own conditions of sale that you should be familiar with prior to the auction. It’s critical to have this reviewed by an expert ahead of time so you are confident that everything is in order.

If the property is passed in on auction day and you’re the highest bidder, you’ll have the opportunity to negotiate with the vendor.

Typically, a successful bidder at an auction will sign the sale contract and put down a 10% deposit on the spot. It’s important to have your daily transfer limit increased ahead of time or have a chequebook or access to a bank cheque to make sure you’re going to be able to make the required deposit.

Private Treaty

‍

Under a private treaty sale a property is listed with a sales agent who markets the property.

A buyer will then make an offer which can include certain conditions, such as begin subject to finance or a building and pest inspection.

You can negotiate on the initial deposit you put down, however, the cooling off period differs between the different states and territories.

New South Wales
- Five business days plus you will have to pay the seller a termination fee of 0.25 per cent
of the purchase price

Queensland
- Five business days and a 0.25 per cent fee
- Standard contracts in Queensland include a finance clause

Victoria
- Three business days and a termination fee of 0.20 per cent

Northern Territory
- Four working days and no termination fee is required

South Australia
- Two business days and the buyer must forfeit a holding deposit of up to $100

Australian Capital Territory
- Five business days and the termination fee is 0.25 per cent of the purchase price

There’s no cooling-off period in Tasmania or Western Australia.

‍