Auction or Private Treaty in Perth: Which Suits Your Home?

For most Perth homes, private treaty is the better fit. Perth is overwhelmingly a private treaty market, auctions are relatively uncommon here, and most Perth buyers are used to making an offer with finance and inspection conditions attached. Auction can work well for a home with no clear price benchmark and strong competing interest, but it costs more to run and it is not a shortcut to a higher price.

The right method depends on your home, your buyer pool and how much certainty you need. Here is how each one works in WA, and how to tell which suits you.

How private treaty works in WA

With private treaty, your home is listed with a price or price guide and buyers make written offers. You can accept, reject or counter each one. Offers usually come with conditions, most often finance approval and a building or pest inspection, and you negotiate the price, deposit and settlement date through your agent.

It is the method most Perth sellers use, and most Perth buyers expect it. That matters, because a method your buyers are comfortable with means more of them turn up and more of them make an offer.

How auction works in WA

At auction, buyers bid publicly on a set date. Before the day, you and your agent agree a reserve price, the lowest figure you will accept. Consumer Protection WA is clear on the rules around it: the reserve stays confidential until a bid reaches or passes it, and the auctioneer cannot sell below it.

If bidding reaches the reserve, the home can be sold on the fall of the hammer. The buyer pays a deposit, typically around 10% of the price, straight after the auction. Their offer cannot be subject to finance or any other condition, so they need finance pre-approved and their checks done beforehand.

If bidding stalls below the reserve, the home is "passed in". Your agent can then negotiate privately with the highest bidder or anyone else interested. In practice, a passed-in auction becomes a private treaty sale.

What each method really costs

Consumer Protection WA notes that auctions can cost more than a private sale. On top of commission and marketing you may be paying an auctioneer's fee, auction coordination, and extras on the day. Get every one of those items priced in writing before you sign the authority to auction.

Marketing is also usually payable whether or not the home sells. If you pay for an auction campaign and the home is passed in, that money is spent. I would not recommend spending it unless the case for auction is strong.

When auction makes sense

Auction earns its extra cost in a small number of situations:

• There is no clear price benchmark. A rare or unusual home, a large block, or a character property with few comparable sales nearby.
• You expect several motivated buyers. Competition in the room is what an auction runs on. Without it, there is nothing to push the price.
• You need a firm, unconditional result on a set date. For example, an estate or a separation where certainty matters more than the last dollar.

If none of those apply, auction is more likely to cost you money than make you money.

When private treaty is the smarter choice

For a typical Perth family home with plenty of recent sales to compare against, private treaty is usually the stronger option. Buyers can see what similar homes sold for, they can make an offer the way they are used to, and first home buyers who need finance and inspection clauses are not shut out.

It also gives you more control. You see every offer in writing, you can take time to consider it, and you choose which conditions and settlement terms you will accept. The trade-off is that a conditional offer can fall over, so a good agent checks how solid a buyer's finance is before recommending you accept.

How to decide for your home

Ask any agent recommending a method three things:

1. How many homes like mine have you sold by each method in the last year, and what did they achieve against the price guide?
2. Who do you expect the buyers to be, and how do they prefer to buy?
3. What is the total cost of each campaign in writing, and what do I pay if it does not sell?

If an agent pushes auction for a standard home without clear answers to those, be cautious. Sometimes the honest answer is "private treaty, and here is why".

Questions sellers ask about auction and private treaty

Do most Perth homes sell at auction?

No. Perth is predominantly a private treaty market and auctions are relatively uncommon compared with Sydney or Melbourne. Most Perth homes are sold by buyers making written offers.

Can a buyer make an auction offer subject to finance in WA?

No. Consumer Protection WA states that auction offers cannot be subject to conditions or finance approval, so bidders need finance pre-approved before auction day.

What happens if my home is passed in at auction?

If bidding does not reach your reserve, the home is passed in. Your agent can then negotiate privately with the highest bidder or other interested buyers, much like a private treaty sale.

Is auction more expensive than private treaty?

Usually, yes. On top of commission and marketing you may pay auctioneer and auction coordination fees, and marketing is normally payable even if the home does not sell. Ask for every cost in writing.

Does auction get a higher price?

Not automatically. Auction can lift the price when several motivated buyers compete for a home with no clear benchmark. Without that competition it offers no advantage and costs more to run.

The honest summary

Auction is a tool for a particular kind of home and a particular kind of market. In Perth, most homes sell well by private treaty, with less cost and more buyers able to take part. Choose auction only when your home is hard to price and you have good reason to expect real competition, and get the full cost of both options in writing before you decide.

If you would like a straight answer on which method suits your home, I offer a free, no-obligation appraisal with the comparable sales attached and every fee set out in writing. You can also download the free Perth Property Guide, which covers pricing, preparation and marketing in more detail.

General information only. This content is not financial or legal advice. Auction rules, costs and agency terms vary by agent and property, and you should read your authority to sell or auction carefully and obtain the costs specific to your situation in writing.