Selling Property via Private Treaty, Informal Tender or Auction
In the UK, there are three common methods of selling a property: private treaty, informal tender, and auction. Each sales method has its own set of advantages and disadvantages.
Selling Property by Private Treaty
In a private treaty sale, the property is listed with a guide price, and the estate agent will market your property to potential buyers. The seller then works with their agent to accept, reject, or negotiate offers.
Pros:
- Maximum Price: With the right marketing, a private treaty allows sellers to explore the market and attract the best price
- Flexibility: Allows for coordination of the sale alongside an onward purchase to ensure the timings correlate
Cons:
- Uncertainty: There’s no fixed timeframe and the seller has no guarantee that the price will be achieved or the property will make it through to the all-important exchange of contracts
- Chain: There is reliance on third parties to make the sale happen. If the chain collapses, it could impede progress
Selling Property by an Informal Tender
With an informal tender sale, potential buyers submit sealed bids by a specified deadline. The seller then reviews the bids and selects the one they find most favourable. It might not necessarily be the highest bid, but perhaps the one that offers more certainty, flexibility or the quickest sale. The informal tender might be arranged from the outset, or more likely, introduced once the property has attracted multiple interest.
Pros:
- Competitive: The competitive nature of tender sales can sometimes lead to higher offers, benefiting the seller
- Straightforward: The tender process can be more structured, as all bids are submitted at the same time
- More Choice: The seller has the option to choose from multiple buyers and if the sale falls through, there are usually alternatives waiting in the wings
Cons:
- No Guarantee: There is no guarantee of multiple bids (although more likely) and the sale could still fall through
Selling Property at Auction
In a property auction, the property is sold to the highest bidder on the day of the auction. A reserve price (the minimum price the seller is willing to accept) is set, and if the bidding does not reach this amount, the property may not be sold.
Pros:
- Speed: Auctions can result in a quick sale, as the entire process is usually completed within a relatively short timeframe
- Certainty: The seller knows that the property will be sold on the auction day if the reserve price is met
Cons:
- Smaller Audience: Auctions may not attract as many potential buyers as private treaty or tender sales, usually due to financing restrictions, which can potentially limit the pool of buyers
In summary, each method of selling a property in the UK has its own set of advantages and disadvantages. The choice between private treaty, tender, or auction will depend on factors such as the seller’s preferences, market conditions, and the specific characteristics of the property.
If you’re considering a property sale, DOMVS can support you through any of the above methods. Call us to discuss your options or start the process with a free valuation of your property.
