What Is a “sale by Private Treaty”?

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A private treaty sale involves the sale of tangible property between two parties that agree to terms before the sale completes, according to Dictionary.com. In the United Kingdom, a sale by private treaty means real estate has been sold without the benefit of an auction, according to Home.co.uk. Land may be offered for sale, but the public may not get a chance to bid on the property.

In the United States, commodities and rare items are often sold without auction if demand warrants a sale by private treaty. For example, Stevenson’s Diamond Dot farm in Montana offers bulls for sale every day of the year. Negotiable conditions include delivery and cattle that are “competitively priced” as of September 2014. Auction house David Feldman offers some particularly rare collectible items for private treaty sale apart from their normal auctions. The company believes advantages to private treaty sales include confidentiality, faster transactions than public auctions and comparable prices.

The Real Estate Institute of South Australia indicates most land sold in south Australia is by private treaty. Contracts are signed between private parties that stipulate certain conditions are met before the property changes hands. A two-day “cooling” period between parties is applicable for private treaty land sales in Australia so both parties consider their options.