Investment Strategy

24 July 2025

8 min read

Auction vs. Private Sale in 2025: Which Strategy Gets You the Best Deal?

When it comes to buying a property, one of the big choices you’ll encounter is how it’s sold: via auction or private sale (private treaty).

Arun Venkatachalam

Helping Australians build wealth through smart property investing.

When it comes to buying a property, one of the big choices you’ll encounter is how it’s sold: via auction or private sale (private treaty). In 2025, both methods are common in Australia, and each has its pros and cons from a buyer’s perspective. As a buyers’ agency, InvestEase has seen clients succeed in both arenas – but also seen buyers trip up without the right approach. So, which strategy is likely to get you the best deal in 2025’s market? The answer can depend on market conditions and your own style as a buyer. Let’s break down auctions vs private sales, and share how expert negotiation can tilt things in your favor either way.

Buying at Auction – High Stakes, High Transparency

At an auction, the property sale comes down to a public bidding process, usually on a set date, with an auctioneer controlling the show. It’s a bit like a real estate showdown: buyers openly bid against each other, and the highest bidder at or above the seller’s reserve price wins the property (contracts are typically unconditional once the hammer falls).

Pros of Auctions (for Buyers):

• Transparency in Pricing: You can literally see what others are offering. There’s no mystery about “Is my offer the highest?” or “What are others thinking?” This can prevent the scenario of overpaying significantly above the next highest bidder (a risk in blind negotiations). Everyone’s cards are on the table.
• Potential to Snag a Bargain: Believe it or not, not every auction is a feeding frenzy. If an auction has few active bidders, a property might actually sell for a reasonable or even low price. For example, if market sentiment is a bit cool or the auction was poorly attended, the lone bidder could win at a bargain. As a buyer, you might prefer auctions in a buyer’s market (more supply, less demand) where you have a good chance of being that lone or winning bidder at a fair price.
• Speed and Certainty: The auction process is usually over in a matter of minutes, and if you win, the property is yours on the spot (pending formalities). There’s a certain efficiency – you’re not in drawn-out negotiations over days or weeks. If the hammer falls in your favor, you exchange contracts immediately. In 2025’s competitive market, this certainty can be appealing: you either win it or you don’t, rather than wondering for a week if your private offer will be accepted or gazumped by another buyer.

Cons of Auctions (for Buyers):

• Emotional Pressure: Auctions are high-pressure. The atmosphere, the fast pace, the auctioneer’s patter, and the presence of other determined bidders can all lead to emotional decision-making. It’s easy to get carried away and bid beyond your limit (a common regret). As a buyer, you need nerves of steel and a clear plan to avoid a budget blowout.
• No Cooling-Off or Conditions: Auction purchases are typically unconditional. This means you usually can’t put in conditions like “subject to finance” or “subject to building inspection.” You have to do all your due diligence before auction day (get inspections done, have finance approved, etc.). If you win, you sign the contract and pay the deposit immediately – there’s no backing out without severe penalties. This puts a bit more onus on buyers to be fully prepared and sure of a property’s condition/value before bidding.
• Competitive Bidding Can Drive Up Price: In a hot market or for a highly sought-after property, auctions can turn into bidding wars. The competition and adrenaline can push the final price well above the seller’s reserve. In fact, research by Domain (a property portal) has indicated that buyers often pay a premium at auction – sometimes around 5-10% more – compared to private sales, especially when many bidders are in play. Essentially, you might end up paying top dollar at an auction, because everyone’s pushing the price up in increments and no one wants to lose.

In 2025, we’ve seen strong auctions in popular areas – for instance, a renovated family home in a trendy suburb can attract multiple bidders, and the price might exceed expectations. On the other hand, if interest has been lukewarm, auctions can also fizzle (property passes in). As a buyer, it’s worth assessing: “Is this property likely to have lots of competition?” If yes, prepare for battle or consider if a different buying method might yield better value.

How to Succeed at Auction: Preparation is key. Set a firm maximum bid based on careful market analysis – what similar homes have sold for and what you can afford. Stick to that limit. It helps to attend a few auctions beforehand to get used to the rhythm. Some buyers hire a buyer’s agent or professional bidder to represent them at auction. This can remove the emotional element; an expert will bid calmly and strategically (for example, making strong early bids to scare others, or conversely waiting until late to swoop in – different situations call for different tactics). In a tightening market, auctions are common, so mastering them or getting help can make or break your success. Remember, sometimes the best decision is to walk away – if bidding goes beyond what the property is worth to you, let it go. There will be other opportunities.

Buying via Private Sale (Private Treaty) – More Flexibility, More Negotiation

A private sale is the traditional method where a property is listed with an asking price (or price range, or sometimes “offers over $X”). Buyers make offers to the selling agent, and negotiation occurs behind closed doors. It could be quick (you put in a strong offer and the seller accepts) or it could involve a bit of back-and-forth on price and terms. There’s generally a cooling-off period (depending on state laws) after signing, and you can often include conditions (finance approval, building inspection, etc.) in your offer.

Pros of Private Sales (for Buyers):

• Time to Consider and Inspect: You typically have the chance to include conditions and do thorough checks. You can make an offer “subject to building and pest inspection” and ensure the house has no major issues, for instance. There’s usually less rush – you can think overnight or for a few days about how much to offer (unless there’s a lot of competition, in which case the agent might set an offer deadline). This can be comforting for first-timers who need that deliberation time.
• Room for Negotiation: Private treaty sales invite negotiation. The asking price is often not the final price. You can start with a lower offer and see if the seller counters. There’s a chance to negotiate not just price, but other terms – maybe a longer settlement if you need to sell another house, or including certain fixtures in the sale. This flexibility can lead to a better overall deal or one tailored to your needs. Skilled negotiators (or buyers’ agents on your behalf) can sometimes secure a property below the asking price if the market is not too hot or the seller is motivated.
• Less Intimidating: Many buyers simply find the private sale process less intimidating than auctions. You’re usually dealing one-on-one with an agent, often communicating via email or phone. You don’t have to make snap decisions in public. This environment can be more conducive to sticking to your budget and not feeling psychological pressure from other buyers.

Cons of Private Sales (for Buyers):

• Lack of Transparency: You often don’t know what other buyers are offering. An agent might tell you “there’s a lot of interest” or “another party offered $X” but you have to take their word for it (and they work for the seller, so there’s an incentive to push you higher). This lack of visibility can cause anxiety – are you paying too much? Are you at risk of being outbid without a chance to counter? Sometimes it ends up in a bit of a blind bidding war, where multiple buyers submit their best offers by a deadline, and the seller picks one. You may never know if you only needed to beat the next buyer by $1,000, but you went $10,000 higher because you weren’t sure.
• Slower and Uncertain: Unlike an auction where you know on the day if you got it, private sales can drag a bit. Negotiations can go back and forth over several days. Meanwhile, a savvy seller’s agent might use the time to shop your offer around to others (“Buyer A is offering $X, can you do better?”). It can be a bit frustrating not knowing if the deal is sealed until contracts are exchanged. There’s also the phenomenon of being “gazumped” – where you think you have an agreement, but before you sign, the seller accepts someone else’s higher offer. While rules around this vary by state, it’s a risk in private sales until all parties have signed on the dotted line.
• Emotional Attachment: Oddly, the slower nature of private sales can sometimes cause buyers to become more emotionally attached to a particular property during the process – envisioning it as “the one” – and thus potentially overshoot their budget or ignore red flags just to get it. At an auction it’s quick adrenaline, but with private treaty you might spend days envisioning your life in that home, which can weaken your bargaining stance if you’re not careful.

How to Succeed in Private Negotiations: Knowledge and strategy play a big role. Firstly, know the market value of the property so you can recognize if the asking price is fair, high, or low. This gives you confidence in formulating your offer. If possible, find out the seller’s motivation – are they looking for a quick sale? Have they already bought elsewhere (making them more keen to sell fast)? Such insights can help tailor your negotiation (for example, a quick unconditional offer at a slightly lower price might tempt a seller who needs certainty fast).

Secondly, use conditions wisely. If you really want a house and competition is heating up, making a clean offer (fewer conditions, or already having finance approved, etc.) can be more attractive to a seller than a higher offer full of contingencies. On the flip side, if you suspect you’re the only interested party, you can safely include reasonable conditions to protect yourself, and negotiate harder on price.

This is also where a buyer’s agent’s expertise shines – they negotiate day in, day out, and won’t be swayed by an agent’s tactics. They can tell when an agent is bluffing about other offers, and how to counter-offer effectively. They also remove the emotion; it’s business for them, which often yields a better result. In a recovering market like 2025, not every property is going to auction – many are private sales and having an expert negotiator can save you a lot. For instance, at InvestEase we’ve helped clients purchase privately for well under the initial asking price, simply by knowing what the property was truly worth and being patient yet persistent in negotiations.

Which Gets You the Best Deal?

So, auction or private sale – which is better for a buyer’s deal? It depends on the situation:

• In a hot market or for a unique “dream” property, private negotiation might save you money versus an auction. Without a crowd driving the price up, you stand a chance to strike a deal at a fair price. You can also walk away if the seller’s price is unrealistic. At auction, you might have gotten carried to that unrealistic price. If Domain’s data shows an average premium for auction sales, it suggests that generally, avoiding a bidding war can be beneficial.
• In a slow or balanced market, auctions can be great for buyers – if few others show up, you could buy below market value because there wasn’t enough competition to push it up. Some seasoned investors love attending auctions in cooler markets for this reason. They might be the only bidder and snap up a deal under the reserve price (if the seller negotiates after a passed-in auction).
• Your personal comfort matters too. Some people are confident at auctions and can stick to their limits, while others find it too stressful. Getting the “best deal” isn’t just financial; it’s also about which method you can navigate without errors. If you know you’re likely to overbid when excited, you might actually fare better in a private sale scenario. Conversely, if you hate drawn-out haggling, an auction’s clarity could work in your favor.

Market conditions in 2025 are somewhat mixed: in many cities, good properties are seeing strong auction results, but there are also instances of auctions with few bidders (especially for properties with a flaw or in areas with less demand). Meanwhile, private sales are commonplace for a lot of suburban and regional properties, with varying degrees of buyer interest.

One interesting note: some sellers and agents choose one method over the other strategically. Highly desirable properties (think a beautiful family home in a blue-chip suburb) often go to auction to milk the competition factor. Properties that are more niche or might need the “right buyer” (think a luxury top-end home, or something a bit unusual) might be sold by private treaty, as the pool of buyers is smaller and an auction could flop. As a buyer, recognize this: the sale method can hint at the situation. If it’s an auction, the agent is confident there are multiple buyers. If it’s private, there might be a chance for more negotiation.

Leverage Expert Negotiation

Whether you’re facing an auction or a private sale, expert negotiation can be the secret sauce to getting a great deal. For auctions, “negotiation” happens in the form of bidding tactics and potentially negotiating with the seller if it passes in (doesn’t meet reserve). For private sales, it’s classic negotiation on price and terms. In both cases, a buyers’ agent or an experienced mentor can guide you. They’ll help set your purchase limit based on data, not emotion. They might bid for you at auction, preventing the heart-from-racing too fast. Or they’ll handle the back-and-forth with a selling agent, using poker-faced techniques to get the price down.

For example, in a tightening market, a skilled negotiator might use the fact that interest rates are likely to fall (meaning more buyers will come later) as a psychological point: “Mr. Seller, you have a committed buyer now. Sure, more buyers might exist later, but prices aren’t guaranteed to spike overnight – take the good offer on the table.” Conversely, they might tell a hesitant buyer: “This is a fair price for this home; if rates drop and 5 more buyers appear next quarter, you’ll wish you locked it in.” Negotiation is part facts, part psychology.

In summary, auctions offer transparency but can incite overpaying; private sales offer flexibility but can lack clarity. Neither is inherently “cheaper” in all cases, but understanding each – and employing the right strategy – will position you to get the best deal possible. For 2025, many buyers will encounter both: perhaps you’ll attend a few auctions and also put in private offers elsewhere. Tailor your approach to each scenario. And don’t hesitate to seek help; buying a property is one of the biggest financial moves you’ll make, so an expert in your corner (like InvestEase) can be worth their weight in gold, whether under an auction hammer or across the negotiation table.

Ultimately, the best deal is one where you secure the property you love within your budget and with terms you’re comfortable with. Both auction and private sale are just different roads to that destination. With preparation and the right guidance, you can confidently choose the road that suits you and come out with the keys to your new home – at a price that makes you smile.