The best way to sell a house: what you need to know

Your home is only worth what someone else will pay for it. But just how to find that buyer who is willing to pay the highest price for their property is a key question for vendors.

So what is the best way to sell a house?

Experts have differing views about the best ways to market real estate, but it all comes back to the individual property and the state of the local market. There is no one size fits all.

If you live close to a major CBD and that market is strong, as it is now in Sydney, many agents would recommend sale by auction.

The theory is that auctions are a quick way of getting a top price because buyers are pitted against each other in a charged, competitive environment.

But successful real estate agent Peter O'Malley challenges the wisdom of auctions in his recently published book, Real Estate Uncovered.

He says that often an agent's real motive for recommending an auction is to push the vendor down in price so a quick and easy sale can be achieved.

If you do decide to auction, do not disclose your reserve price to your agent, warns O'Malley, because he or she will use it as your target price and will be happy to achieve that.

"If you set a reserve price of $500,000 and sell for $520,000, would you consider it a good sale if you found out the buyer was prepared to pay $550,000?" asks O'Malley in his book.

Deadline sales, such as tenders, can be effective for unique, hard-to-price properties.

Sometimes called "silent auctions", they require interested buyers to nominate their best price by a certain date. Some buyers are wary of this process, limiting numbers, and some may put in a low offer hoping for a bargain.

Most residential property sells by private treaty, where the vendor engages an agent to market the property.

Getting the price strategy is the tricky part of achieving success.

Should you go for a fixed price, price range or offers from a certain price, sometimes billed as "offers over"?

A fixed price suits everyday properties in suburbia and most buyers feel comfortable with it. .

Buyers are also aware that they can negotiate the price down, so make sure you set your price a bit higher than you are willing to accept so you have wriggle room.

With ranges, such as $400,000 to $450,000, many buyers focus on the lower figure, meaning you should get lots of people through the door.

The downside is you have revealed your minimum price and some buyers may go below that.

This method can be used to test what buyers are willing to pay without fear of overpricing.

"Offers over", a tactic extensively used in Scotland, can work in buoyant markets for properties that are in strong demand, particularly if there is a deadline for offers.

But, as with price ranges, people fixate on the lowest figure.

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