Selling House: Auction, Private Sale or Set Sale?

When you are ready to sell your house

Buying a house can be fun, selling house is always stressful. If you are ready to get a new house, need to relocate or just downsize your dwelling you face the questions:

How much should I be selling house for?
What real estate agent to go with?
What method of selling house should I use?

What price should the house be sold for?

You would need to find a compromise between a dream price and realistic price. Dream price is probably the one your neighbour received for a house slightly better than yours. Realistic price can be provided by independent property valuator.

When selling house remember: your house is worth what it is paid for on the day.

Real life example of selling house

M. who lives 2 streets away from me ambitiously priced his house at $1M. Properties in our area typically are much cheaper, but this property has a lot of unusual features.

The highest bid at the auction was $950K - just $50K short of the goal price. M. did not sell house. Selling house via private sale failed. Next auction in 3 months time did not even attract proper bidders.

Prior to selling house, M. purchased another property and now had to pay interest on the full amount of his mortgage.

In our opinion M. should have sold the house at the first auction. First of all selling house is not a precise engineering because no one can set a "proper" price. Always allow for variations of 5%-10%.

Selling house with proper real estate agent

All real estate agents are same - right? No!

Of course real estate business (same as car mechanics') is tricky, stressful and therefore some agents are pushy. When they negotiate a lot is promised, often under-delivered.

Look for real estate agent with integrity. Before selling house talk with the people you know who were selling houses before and make a short list of reputable real estate agents.

Invite them for discussion but do not sign anything unless you believe that you deal with responsible and professional person.

Selling House Method

In good times it is good to sell house at the auction. Good results are realistic because of the high demand. When times are bad or unclear - what happens now every few months - private sale or Set Sale should work better.

No matter what selling method you choose you should be aware of inspections. 2 or 3 times a week you have prepare your house for visitors, leave for couple of hours and then clean again.

When it happens over period of several weeks be ready get annoyed with the whole process.

Selling House at Auction

Prepare to experience a lot of stress when selling house at auction. A lot of uncertainty lies in the auction process: sudden changes of weather, political events, social occasions, sporting disturbances etc. At the end of the day your dream buyer did not come and house can be sold cheaper or passed in.

Selling House via private sale

This house selling method is more predictable and involves less stress. When house appear on the market usually it attracts attention and you have to be sell it at a close price.

Your enemy in private sale is time. The longer you are selling house the less interest it generates. So if you did not sell on time - prepare to lower your expectations.

Selling House using Set Sale method

Set Sale method of selling houses is relatively new. Along with real estate agent you set the price range. Offers are welcome and you can sell when you feel the price is right. Psychologically Set Sale house selling works for sellers because buyers compete for your house in full darkness. That is why you may achieve better price, in shorter period of time and with less stress.

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Selling House: Auction, Private Sale or Set Sale?
Selling house at the auction is very stressful and has no certainty. Private sale can fail if the house is not hot. Set sale of a house is a New Age method. Achieve better price, in shorter period of time and with less stress when selling house.