Selling your property, whether it’s a lot of undeveloped land, or it’s a farm that’s been in the family for generations, is a massive step in life. Obviously, you want to get as much out of the land sale as possible to make your life easier going forward.
How do you do that, though?
Well, you have two main options. You can conduct a private sale, the type of sale you’d typically expect someone to have when selling any type of home. You can also put the property up for auction.
Which one is best: private sale vs. auction? Let’s compare the two, and you can figure it out for yourself. Each method has its own merits, and we’ll make sure to point those out.
A private sale is probably what you’re used to. You contact a real estate agent, they put it up on the market and look for buyers, and your home sells for somewhere close to its value unless the buyer negotiates a lower price.
This is fairly simple, and you get a good idea of how much you’ll get. You get to set the price, and you can ignore offers that are lower than what you’d like for the property.
However, this also comes with a lot of hands-on responsibility. You’ll have to speak to your real estate agent frequently, discuss offers that are brought to the table, and you’ll have to deal with people bringing certain loan types to the table that you don’t want to mess with.
Beyond hands-on responsibility, you’re also held liable for a lot more. Buyers can demand that certain aspects of the property be changed at your expense before they purchase, and they have a much better ability to nitpick over every single detail of the property. People have found ways to force a home’s price down over simple things like leaky faucets, paint they don’t like, and uneven dips in the land. Given enough time, a buyer can find any reason to attempt to get a better deal than they should.
This can also take far longer to pull off. The property can be listed for years if you’re stern about your price and don’t take lowball offers.
This can be a good way to start, but if it takes a long time, or you notice the offers you’re getting are way too low, it might be time to try a different approach.
A property auction is basically the opposite of a private sale. You might get to set the starting price and minimum price, but it will typically be lower than the property value, after all, auction-goers aren’t looking to pay way above the property value.
That can be a good thing, though. If you set a starting price that is close to what you want or is at least the minimum you’ll accept, the bids have the potential to get you a lot more than you’d have gotten in a private sale.
On top of that, it’s a lot more hands-off. An auction company handles the whole deal, and you have little more to do than fill out paperwork to facilitate the final transaction.
Finally, auction-goers don’t get to continuously come back to your property and inspect every tiny detail, and they don’t get to argue about little things they don’t like. They either bid on what they see, or they don’t.
Now that you know the differences between private sale vs. auction, learn more and get informed about auctions on our website.