Most homes in Australia are not sold at auction. They are sold by private treaty — listed with an asking price, negotiated through the agent, and settled on terms the buyer and seller agree between themselves.
It is the quieter of the two sale methods and, for a buyer, usually the safer one. You get time to think, you can make the contract conditional on finance, and in most states you get a cooling-off period after you sign. Here is how it works.
What is a private treaty sale?
A private treaty sale is one where the seller advertises the property at a price, or a price range, and buyers negotiate privately through the selling agent until the two sides agree on a figure and terms.
There is no public bidding, no auctioneer, and no single day on which the property must sell. The agent carries offers between the parties, and the seller can accept, reject or counter any of them.
You may also see it called a “private sale”, particularly in Victoria. It means the same thing.
Private treaty vs auction: the practical differences
The price
At auction the price is set in public, in real time, by whoever is willing to bid highest. Under private treaty it is set by negotiation, and neither side knows for certain what the other will accept.
Conditions
This is the difference that matters most.
Buying at auction means buying unconditionally. The contract cannot be subject to finance, subject to a building and pest inspection, or subject to the sale of your existing home. The hammer falls, you sign, and you are committed.
Under private treaty you can negotiate conditions into the contract. A finance clause, a building and pest clause, a longer settlement, or a settlement date tied to your own sale are all on the table. The seller does not have to agree, but you can ask.
Cooling off
Auction sales have no cooling-off period anywhere in Australia. Private treaty sales generally do, though the length and the penalty vary by state.
Time
An auction campaign runs to a fixed date. A private treaty listing can sit on the market for weeks or months, which gives you room to arrange finance properly, get the inspections done and think about the number.
Cooling-off periods by state
Cooling off lets a buyer walk away from a signed contract within a set window, usually by forfeiting a small percentage of the price. The rules are set by each state and territory:
- NSW — 5 business days. Forfeit 0.25% of the purchase price.
- Victoria — 3 business days. Forfeit $100 or 0.2% of the price, whichever is greater.
- Queensland — 5 business days. Termination penalty of 0.25% of the price.
- ACT — 5 business days. Forfeit 0.25% of the price.
- South Australia — 2 clear business days. No penalty.
- Northern Territory — 4 business days. No penalty.
- Western Australia — no statutory cooling-off period for residential property.
- Tasmania — no statutory cooling-off period.
Cooling-off periods can be waived, and in NSW sellers routinely ask for a waiver certificate from the buyer’s solicitor before accepting an offer. Get your own legal advice before you sign one. The rules also change, and there are exceptions — your conveyancer or solicitor is the person to confirm your position with.
How the negotiation actually runs
1. The property is listed with a price or a range. Under private treaty the seller has usually set a figure they will accept, even if the advertised number is lower.
2. You inspect and do your homework. Comparable recent sales in the street and the suburb are the only reliable guide to what the property is worth. The agent works for the seller.
3. You make an offer, in writing. Verbal offers get relayed and forgotten. A written offer that states your price, your deposit, your settlement period and any conditions is much harder to ignore, and it makes you look organised to the seller.
4. The seller accepts, rejects or counters. There is often more than one round. Nothing is binding at this stage.
5. Contracts are exchanged. Both parties sign, you pay the deposit (usually 10%, sometimes negotiable to 5%), and the contract becomes binding — subject to any cooling-off period and any conditions written into it.
6. Settlement. Typically 30 to 90 days later, depending on what you agreed.
Getting your finance right before you offer
A private treaty purchase gives you the option of a finance clause, but relying on it is a weak position to negotiate from. Sellers discount conditional offers, and a buyer with pre-approval in hand can often win a property for less than a buyer without one.
Whether you use a broker or go direct to a lender changes how quickly that pre-approval comes together — we cover the trade-offs in mortgage broker vs bank.
Two things are worth doing before you start making offers:
- Get formal pre-approval, not an online estimate. A credit-assessed pre-approval means a lender has looked at your income and your liabilities. An online affordability calculator has not.
- Understand the valuation risk. Lenders lend against their own valuation, not your contract price. If you pay $50,000 above what the valuer says the property is worth, you cover that gap in cash. Your finance clause needs to be worded to protect you if the valuation comes in short — that is a conversation for your broker and your solicitor before you sign.
Strengths and weaknesses for a buyer
What works in your favour
- You can make the contract conditional on finance and on inspections.
- In most states you get a cooling-off period.
- There is no deadline forcing a decision, and no auction-day pressure.
- Settlement terms are negotiable, which can matter a great deal if you are selling as well as buying.
What works against you
- You cannot see the competition. You may be bidding against another buyer, or against nobody at all, and the agent is under no obligation to tell you which.
- Price guides can be vague, and underquoting rules vary by state.
- A property can be sold before you get a chance to offer, particularly early in a campaign.
- Negotiations can drag on for weeks while the seller waits for a better offer.
Common questions
Can a private treaty property be sold before the advertised close?
Yes. There is no fixed sale date. If the seller accepts an offer on the first weekend, the property is gone.
Is my offer binding?
Not until contracts are exchanged and signed by both parties. Before that, either side can walk. In practice this means a seller can accept a higher offer after verbally accepting yours — gazumping, and it is legal in most states.
Should I offer below the asking price?
It depends entirely on how long the property has been listed, what comparable homes have sold for, and how motivated the seller is. A property that has been on the market four months is a different negotiation from one listed last week.
Do I still need a building and pest inspection?
Yes. Private treaty lets you make the contract conditional on the result, which is one of the real advantages over buying at auction. Use it.
This article is general information only and does not take your circumstances into account. Cooling-off periods, contract rules and disclosure obligations differ between states and change over time — confirm your position with a licensed conveyancer or solicitor in your state before signing anything.