This is a common question. The best person to help you answer this is the property specialist who is going to help you sell your property.
Here is an overview of both methods. With either method the real estate commission is still only 1%=gst.
With an auction, the property is put up for sale at a set place, at set date and time of the day. The auction date is what everyone works to. The auction may be conducted on site or in an auction room. Some agents prefer on site auctions as it keeps the actual property front and mind for the purchaser.
Auctions are public events where the bids are made in public.
The highest bidder buys the property, as long as the vendors reserve price has been met. This reserve is not made public before the start of the auction.
During an auction, once the reserve has been met, the auctioneer can “knock down” the property which is normally indicated by the fall of the hammer.
Once the property is sold the purchaser will be required to pay the 10% deposit.
The real estate commission for an auction programme is 1%+gst.
The advantages of an auction are they create a sense of urgency, and most importantly there can be competition between buyers which can drive up the price.
The disadvantage of auctions, are they may be stressful for both buyers and sellers. especially if he property may not sell on auction day.
The major disadvantage is conditional buyers are excluded.
Normal Sale (Selling at an advertised price or by negotiation)
An agreed selling price is worked out between the vendor and the real estate agent. This is the price the property is marketed at.
A property may also be for sale by negotiation.
Buyer Enquiry Over (BEO) or Buyer Budget Over (BBO) or price guide.
The seller advertises the property and receives offers from buyers. These offers may be conditional on title search, finance etc..The seller then accepts an offer and the buyer pays a deposit. Once all the conditions are met the sale then goes unconditional. Property settlement occurs and the remainder of the purchase price is paid.
The advantage of normal sales are there is much more flexibility and less pressure. The disadvantage is there is a fixed maximum asking price and there may be no urgency with the buyers.
The real estate commission for normal sale is 1%+gst.