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| Auction
or Private Treaty? |
To get
the best price for your home, should you sell by auction or private
treaty? The choice of types of agency is actually broader than that.
- Exclusive
- Auction
- Multilist
- Sole
- Open
The first three
of these are variations of an exclusive agency. An agent will usually
suggest an auction agency or an exclusive agency, both of which give
that agent the exclusive right to sell the property.
 If
another agent sells it within the agency period without obtaining
what is called a "conjunction agency" from the listing agent, you
may have to pay two commissions. Ask agents before signing up if they
give conjunctions to other agents.
If you
sign an exclusive agency and sell the property yourself, you still
have to pay the agent the commission.
"Multilist" is where an agent signs you to an exclusive agency on behalf of a group of agents. Under this arrangement, the listing agent gets a share of the commission if another agent in the group sells the property.
A "sole" agency gives sole selling rights to an agent but allows you to find a buyer yourself without paying a commission.
An "open" agency may be given to as many agents as you like and you only pay commission to the one who sells it.
Agents generally work harder on an exclusive agency than an open agency because they do not risk spending time on a property only to have another agent make the sale and get the commission. But ask them: "What will you give me in return for an exclusive listing that I will not get from an open listing?"
A good auction campaign ensures the property is brought to the attention of the maximum number of potential buyers, and those buyers have a limited time in which to conduct their inquiries and make up their mind.
The auction itself creates competition between buyers which can push the price up, and when the hammer falls you know you have a definite sale.
But the considerable costs of an auction can be lost if the bidders fail to materialise. There can also be considerable pressure on you at the auction to take a price which falls short of your expectations.
Whichever type of agency you select, always read the form carefully at your leisure before signing it. |
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