What's the Difference?
An auction is a public sale where buyers bid against each other on a set date. If the reserve price is met, the property sells immediately with an unconditional contract.
A private sale (private treaty) involves negotiating directly with the seller through their agent. Offers are submitted privately, and contracts typically include a cooling-off period in NSW.
Key Differences: Auction vs Private Sale
| Factor | Auction | Private Sale |
|---|---|---|
| Timing | Set date; typically 3–4 week campaign | Open-ended; can take days, weeks, or months |
| Price transparency | Public bidding; all buyers see competing bids | Private negotiations; other offers not disclosed |
| Cooling-off period | No cooling-off in NSW | 5 business days in NSW (can be waived) |
| Contract conditions | Unconditional on fall of hammer | Can include conditions (finance, inspections) |
| Due diligence | Must complete before auction day | Can continue during cooling-off period |
| Deposit | Usually 10% on the day | Negotiable; typically 5–10% |
Auction Overview
Auctions are conducted under NSW legislation. All registered bidders participate at a set date and time. Key characteristics:
- Clear sale date and defined timeframe
- Transparent bidding visible to all participants
- Unconditional contract when reserve is met
- No cooling-off period applies
- Due diligence must be completed before auction day
For preparation and bidding strategies, see Auction Strategies.
Private Sale Overview
Private sales (private treaty) involve submitting offers to the selling agent. Negotiations occur privately. Key characteristics:
- Opportunity to negotiate terms privately
- More time for due diligence
- Ability to include conditions (where accepted by vendor)
- 5 business day cooling-off period in NSW (can be waived)
- Deposit amount is negotiable
Your solicitor can explain how the cooling-off period and contract conditions work in your situation.
Frequently Asked Questions
Is it better to buy at auction or private sale?
Neither is inherently better. Auctions offer price transparency but require unconditional contracts. Private sales offer more flexibility and cooling-off protection. The right choice depends on your circumstances.
Can I make an offer before auction?
Yes. The vendor may accept, reject, or use it to bring the auction forward. Pre-auction offers are often required to be unconditional.
What is the cooling-off period in NSW?
For private sales in NSW, there is a 5 business day cooling-off period. If you withdraw, you forfeit 0.25% of the purchase price. This can be waived with a Section 66W certificate. Auctions have no cooling-off period.
What happens if a property passes in at auction?
The highest bidder typically has first right to negotiate with the vendor. The property may then be listed for private sale.
How a Buyers Agent Can Assist
A buyers agent can assist with both auction and private sale purchases by analysing comparable sales, assessing value, preparing a negotiation or bidding plan, and representing you throughout the process.
For buyers unsure which method suits them, a buyers agent can help weigh up the options in consultation with your legal and financial advisers. See Buyers Agent Sydney for more information.
Comparing Auction and Private Sale Options?
Iconic Assets can assist with both auction and private sale purchases in Sydney. We recommend you also seek independent legal and financial advice.
Contact UsGeneral Information Only: This page provides general information about auction and private sale methods in NSW. It is not legal or financial advice.
NSW Focus: Other states may have different rules regarding cooling-off periods and auction conduct.
Seek Professional Advice: Before buying property, obtain advice from a solicitor and financial adviser.