If you frequently browse real estate listings, you’ve likely seen phrases like “for sale by auction” or “for sale by private treaty.” While auctions remain a popular method for selling homes in Australia, not everyone feels comfortable with bidding under pressure. In such cases, a private treaty sale may offer a more suitable alternative.
What Is a Private Treaty Sale?
A private treaty sale occurs when the seller sets an asking price for the property. This price is usually determined through market research and advice from a real estate agent. Rather than going to auction, the seller negotiates directly with interested buyers via the agent.
When both parties agree on the price, the buyer typically pays a deposit. In many states, this step is followed by a cooling-off period—a short window during which the buyer can withdraw from the deal. However, withdrawing may result in a partial loss of the deposit, depending on local regulations.
How Does a Private Treaty Sale Work?
A private treaty sale typically follows a structured process:
1. Property Listing
The seller lists the property, often with a fixed asking price or a price range to attract interest.
2. Buyer Research and Inspections
Potential buyers inspect the property and research its condition, location, and market value.
3. Offers from Buyers
Interested buyers submit offers through their agents. These offers may be below, at, or above the asking price.
4. Negotiation Phase
The seller reviews each offer and may choose to negotiate terms or price before accepting one.
5. Exchange of Contracts
Once both parties reach an agreement, contracts are drafted and exchanged with help from solicitors and agents.
6. Meeting Contract Conditions
Buyers complete any required conditions—such as finance approval, building inspections, or valuations—before the contract becomes final.
7. Cooling-Off Period
In most states, buyers get a cooling-off period after signing. This gives them time to reconsider or withdraw, although fees may apply.
8. Settlement Day
On the agreed settlement date, the buyer pays the remaining balance. The seller hands over the keys, and legal ownership officially transfers.
Private Treaty vs. Auction: What’s the Difference?
Understanding how private treaty sales differ from auctions can help you choose the right approach.
Private Treaty Sale
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The seller sets the price and negotiates directly with buyers.
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Offers can be made at any time while the property is on the market.
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Buyers usually benefit from a cooling-off period, which provides flexibility.
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There is no pressure from competing bids, allowing for more considered decisions.
Auction
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The seller sets a reserve price, and buyers bid against each other in a live setting.
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The highest bid above the reserve wins.
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Auctions are transparent; all bids are visible, which helps gauge market value.
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There is no cooling-off period—once the hammer falls, the deal is final.
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Buyers must have finances, inspections, and legal reviews done before the auction.
Which Option Is Right for You?
Choosing between a private treaty and an auction depends on your personal circumstances, risk tolerance, and how quickly you want to buy or sell.
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If you prefer time to negotiate and value flexibility, a private treaty might be better.
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If you’re comfortable with fast-paced bidding and have done your due diligence, an auction can offer opportunities—especially in a hot market.
Final Thoughts
Both private treaty sales and auctions have their pros and cons. Understanding the process behind each method helps you make informed decisions, whether you’re buying your first home or adding to your investment portfolio.
For tailored advice, consider speaking with a local real estate agent or solicitor. They can guide you through the legal and financial implications of each option based on your goals and the property’s location.
