Private Treaty
Any method of sale other than an auction is called a private treaty. The main difference is that you are able to make an offer privately.
A private treaty is generally not as stressful as an auction as you are not under a time pressure with other keen buyers in the same room.
The disadvantage is that you don’t know if there is another potential purchaser and what they are offering. You are more in the dark.
Examples of private treaties include:
- Tender
- For Sale
Unlike an auction a price could be negotiated and agreed and you are still not obligated to buy the property and the seller is not obligated to sell the property at the negotiated price.
In most cases, you would negotiate the price before a building inspection is carried out or a conveyancing solicitor checks the contract. It is up to you the order things are done. The logic behind this sequence is that people don't like to spend money if a price can not be agreed as it will be a waste of money.
Once the contract is signed and a deposit is paid, the contract is deemed to be exchanged are all parties are now locked in to proceed.
Up until the contract is exchanged, the seller could accept a higher offer from another bidder and you could loose the property ie being gazumped
