What is the difference between private treaty and auction
Residential Sales – Selling Your Property
Private treaty and auction are the two methods of sale in Ireland.
The main difference between the two methods is that your bids at auction are binding and incompletion of the sale is not an option and would see the buyer losing their 10% deposit as well as being contracted to buy the property, whereas in private treaty they are not binding until contracts are signed allowing you to walk away from a property.
Auction is seen as less favourable to buyers. Buyers are forced to do their due diligence before buying as many properties for sale at auction have legal, structural or title issues. This can be costly especially in the case where they may not win at auction but have already spent the money required to carry out their due diligence. Bids set at auction are also binding meaning there will be no going back on bids placed. Bidding at auction also runs the buyer the risk of losing their deposit. Auctions can be done online or in person and generally are a faster process.
Private treaty is the most common, often it leaves many buyers frustrated as they don’t know who they are bidding against and can’t see what other bids are coming in. Although it is seen to be the more secure method of buying properties for buyers as you are not binded to buying the property until contracts have been signed. Once the property has gone sale agreed the solicitor of the buyer can then begin with due diligence before the buyer is locked into the contract.
An example of an auction is 4bids, an online bidding service. 4bids offers bidding as a function of the agent’s own site, users don’t get moved from site to site. They charge per property €25, meaning no contract, no subscription, just pay as you use.
Another example of an online bidding service is offr, which “enables buyers to make private offers, bid in auctions, book viewings, upload proof of funds, download legal documents and even digitally sign contrasts using Docusign… on any device anywhere”.
The benefits of auctions are that they are generally faster, often closing the sale in about 4 weeks. They are more convenient as they can be done remotely online. As they can be reached online, they reach a wider audience meaning more potential buyers. All relevant documentation, photos and videos of the property is conveniently available to buyers.
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