Private Treaty or Auction

Private Treaty or Auction

By Jarryd O'Donnell

It is important to understand the processes involved with both private treaty and auction sales, whether you are a buyer or seller.


A majority of properties are sold through private treaty. Under private treaty, the owner sets the price they would like to achieve for their property, with the help of the real estate agent. To ensure the price is set correctly, the agent will present the owners with comparable properties recently sold in the area, to ensure an informed decision is made.

Setting the price is very important. Setting the price too high could potentially result in very few or no offers, as potential buyers view the property to be overpriced compared to the rest of the market. The price should be set around or just above market value to allow for negotiation. As the competition during a private treaty sale is lessened, purchasers tend to negotiate downwards, which is why it is important to be above the market value.


Sale by auction puts your property on the open market. The owner sets the reserve price (the minimum price they will sell the property) and prospective buyers make their bids with the property going to the highest bidder.

An auction is used when there is higher demand, as the owner will benefit from potential buyers competing against each other. Conducting an auction where there is low demand/interest can result in the property being passed in, as the reserve price has not been reached. Your chosen agent will guide you as to which path is most suitable for you and your property to get the best result.