The million-dollar question when deciding whether to put your home up for auction or simply list it for sale is to consider which approach will create the greatest buyer competition.
That's according to Chris Scullin, who has worked in the Canberra real estate sector for the past 15 years.
The CEO and co-founder of Lyster says while auctions can deliver exceptional results when there are multiple motivated buyers prepared to compete on the day, they also carry greater downside if they don't go to plan.
"A well-run private treaty campaign may take a little longer, but it gives sellers more flexibility to negotiate, respond to buyer feedback and keep more buyers engaged throughout the campaign," Scullin says.
Sellers should also remember that every sales process can influence buyer behaviour.
Auctions require buyers to complete their due diligence upfront, have unconditional finance in place, waive cooling off rights and bid publicly on a fixed day.
As Scullin points out, that's perfectly acceptable for some buyers.
"For others, it's enough to stop them participating altogether. The question every seller should ask is whether the chosen sales strategy is attracting the largest possible pool of motivated buyers, or unintentionally reducing it," he says.
The downside of listing your home for sale is that it can take longer to sell. But the downside of an auction can be much greater if it doesn't go to plan.
"If a property is passed in, the negotiation hasn't disappeared, it's simply been delayed. The difference is that everyone now knows what your strongest buyer was prepared to pay, creating a very different negotiating position," Scullin says.
Remember, buyer demand is what creates competition not auctions, he says.
Scullin insists that a skilled negotiator can create exactly the same competitive tension through a well-managed private treaty campaign by negotiating transparently.
"One question I think sellers should ask more often is whether auctions have become the default because they're always the best outcome for sellers, or because they've become the industry's preferred sales process.
"Auctions provide a fixed campaign, a clear decision date and operational certainty for agents. Whether that also delivers the best outcome for the seller depends entirely on the level of genuine buyer competition," Scullin says.
For a home in a strong-demand pocket with plenty of active buyers, an auction can work brilliantly, because the deadline and competitive atmosphere tend to flush out a buyer's true limit, according to Troy Malcolm, managing director, McGrath Estate Agents.
In a competitive market, auctions can help buyers see each other and forces them to make quick decisions. In a cautious market, a well-run private treaty campaign can encourage a serious buyer to step up without the pressure of a crowd, Malcolm points out.
But if the market is a bit patchier, or the home is more unique and buyers need time to do their homework, listing a home could be a smarter strategy, he says.
"There's no one-size-fits-all approach. You need to consider your property, the current performance of your local market and your comfort as a seller," he says.
"The last piece is you. Some owners enjoy the energy and transparency of auction day, while others prefer the privacy of a negotiated sale."
Also, keep in mind is that you can change your mind during the campaign.
It is common to start with an auction, gauge the response over the first couple of weeks, and then move to a
clearly priced private treaty if we don't see the depth of bidding we need.
"Equally, if we launch a private treaty and buyer interest runs hot, we can pivot to an auction framework to introduce a deadline and capture that competition. The key is to plan that flexibility upfront so that any shift in strategy feels considered, not reactive to buyers and sellers," Malcolm says.
Both experts agree that it's up to estate agents to show vendors what's happening in your suburb and recommend a strategy that gives you the best shot at the result you want.
