If you’ve recently had a home loan approved or are already some way into your repayments, you may be thinking about how you can pay it off sooner rather than later. We explore some smart ways to shave interest – and years – off your mortgage.
Given the recent changes in the property market, more Australians are looking to private treaty sales as a selling option. If you’re still looking to buy a home but aren't sure if now is the right time, a private treaty could be right for you.
Compared with auctions, private treaty sales can often be a calmer experience for buyers, with the possibility of less intense, second-by-second negotiation on price and conditions – an option worth considering in this current environment.
Private treaty sales explained
A vendor selling property through private treaty typically sets a price (or price range) they wish to sell for based on a range of factors, including recent comparable sales in the neighbourhood. They usually use a real estate agent to advertise the property for sale and to conduct open inspections so potential buyers can inspect the property.
Unlike auctions or fixed date sales, private treaty sales usually don’t have a set date by which the property is to be sold.
The way in which a property’s selling price is advertised can vary. If you are searching through ads on property selling websites and in the newspapers you’re likely to see one of the following:
- a set advertised price, for example "$500,000"
- a price range, for example "$500,000-$540,000"
- a price range with a fixed sales date
- an ‘offers over’ invitation, for example “offers over $500,000”
- an invitation to contact the real estate agent to find out the price
- an invitation to negotiate, for example “by negotiation”
Note that vendors sometimes choose to sell their property privately - that is, without using a real estate agent and dealing directly with potential buyers.
Positives of buying through private treaty
- You won’t need to worry about the conditions and pressures of buying at auction
- Unlike an auction, where offers below the reserve usually aren’t accepted, you can put in an offer below the asking price and negotiate as necessary with the vendor from there. Often there is no time limit for this negotiation
- You have the freedom to put in a conditional offer, such as an offer subject to finance or a building and pest inspection
- Private sales are usually subject to cooling-off periods, meaning that even after you’ve signed a contract of sale you may still be able to change your mind and withdraw from the purchase within a few days of signing
Things to know about private treaty sale
- It can often take longer than going to auction, which may be an issue if the clock is ticking because, for example, you need to move from your current rental property
- You’re at risk of being drawn into a non-transparent bidding process among interested parties designed to push the final sale price higher