Why vendors choose auction over private treaty

someday2010

Curious to understand why vendors sell at auction rather than private treaty, does it mean there is a bank in the background? Or there are issues with the property? Or vendor is just desperate to wrap up the sale quickly?

L1011

Any of those reasons and more.

Poor title is a common one but going for auction does not mean it has poor title of course

4ensic15

The advantage of an auction is that if it works and the hammer falls at a good price a contract is formed on terms dictated by the vendor. This avoids the hassle of private treaty sales where deals trundle along for months and break down and biddres try and change the terms of the contract. It also meants that the property is only on view for a few weeks during the advertising campaign.

The disadvantage is the cost of an auction and the fact that if it doesn't produce a bid there is no option but to go private treaty in the end.

ted1

4ensic15 wrote: »

The disadvantage is

It excludes most people who are buying via a mortgage. The bank may not release funds for the house. So they dint bother bidding

riclad

House may be in bad condition, its hard to get a loan on a an old house in bad condition.
Also the vendor knows the house will be sold on a certain date,
at at least the reserve price .
it may be faster than just putting it on sale with a local estate agent.
i wonder what happens to house,s if someone has no will ,
and the owner has no family in ireland .
And the owner pass,es away.
does the council take it over after a certain time .
it reduces the no of possible buyers ,
the person who buys it will probably have to buy it without using a mortgage , they already have the money in the bank.

Claw Hammer

ted1 wrote: »

It excludes most people who are buying via a mortgage. The bank may not release funds for the house. So they dint bother bidding

That is an advantage for the vendor. Who wants to be at the mercy of banks when selling their house?

Victor

It is also used for properties that are considered 'unique'. That would mean a price of at least €1-2 million for a house.

ted1

Claw Hammer wrote: »

That is an advantage for the vendor. Who wants to be at the mercy of banks when selling their house?

People who want to get the maximum price. Narrowing a market of 100 people to 5 is just stupid

looksee

Coincidence, I just went and looked at an auction house. Seemed great, house looked a bit run down, bit elderly, but sound. Went round the back. Rushes as far as the eye could see. Not just odd tufts, solid field of rushes. Chance of putting in a new septic tank? Wouldn't chance it.

4ensic15

ted1 wrote: »

People who want to get the maximum price. Narrowing a market of 100 people to 5 is just stupid

It can only be sold to one person. 95 others dicking around looking for finance aren't going to drive the price up.

riclad

One person will buy your house,
someone who is well off may not random strangers walking round the house .Which happens in a standard non auction sale.