Auction vs private treaty vs tender: how does each way of selling land work?

There are four common ways to sell agricultural land in England and Wales: private treaty, informal tender, formal tender, and auction. The biggest difference between them is the moment the buyer becomes legally committed. In private treaty and informal tender, that's exchange of contracts, weeks or months after an offer is accepted. In formal tender, it's the moment the seller accepts a bid. At a traditional auction, it's the fall of the hammer.

Everything else, from timescales and costs to confidentiality and the risk of the sale falling through, follows from that. Scotland works differently again, with offers, closing dates, and missives.

When is the buyer committed under each method?

The legal reason auction is different is written into statute. The Law of Property (Miscellaneous Provisions) Act 1989, section 2 says a contract for the sale of land in England and Wales can only be made in writing, with all the agreed terms in one signed document or in each of the exchanged parts. Subsection 5 disapplies that rule for a contract made in the course of a public auction. A handshake, an agreed price, or an accepted informal tender is not a contract. A winning auction bid is.

How does private treaty work?

Private treaty is the most familiar route. The land is marketed at an asking price, or "offers over", and buyers negotiate with the seller, usually through an agent. When a price is agreed, both sides instruct solicitors, the buyer's solicitor raises enquiries and runs searches, and the sale becomes binding only when contracts are exchanged.

What it offers the seller:

• Flexibility. You can take an early offer, wait, split lots differently, or agree conditions such as "subject to planning" or an overage.
• Confidentiality. Offers aren't public, and the sale can be marketed openly or offered quietly to a few known buyers.
• Conditional deals. Promoters, developers, and buyers who need finance can make offers they couldn't make at a traditional auction.

What it costs in certainty:

• Nothing is binding until exchange. Either side can withdraw or renegotiate after a survey, a search result, or a change of heart.
• No fixed timetable. How long it takes depends on the solicitors, the buyer's funding, and what the searches turn up. Our guide to how long it takes to sell agricultural land covers the stages.

Private treaty also covers advertising direct to buyers without an agent, which our guide to selling land privately explains. Where an agent is involved and the property is residential, The Property Ombudsman's code for residential estate agents requires them to put all offers to the seller and to explain the benefits and disadvantages of the method of sale they recommend.

How does an informal tender work?

An informal tender is private treaty with a deadline. After a marketing period, every interested buyer is asked to submit their best written offer by a fixed date and time. The seller then looks at all the offers together.

• Offers are not binding. The seller can accept the highest offer, a lower one with better terms, or none. The chosen buyer can still pull out before exchange.
• One round, usually. Each buyer gets one bid and doesn't see the others. Tender terms often say that referential bids ("£1,000 more than the highest other offer") won't be accepted.
• Terms matter as much as price. Sellers commonly ask for proof of funds, the buyer's solicitor, any conditions, and a proposed timetable alongside the figure.

Once an offer is chosen, the sale proceeds exactly as private treaty, with the same fall-through risk until exchange. Informal tender is often used when a lot has drawn several interested buyers and the seller wants to bring them to a decision at the same time.

How does a formal tender work?

A formal tender combines the sealed bid of a tender with the commitment of an auction.

1. The seller's solicitor prepares the full contract and legal pack before marketing starts.
2. Each bidder does their due diligence, fills in their price, signs the contract, and returns it with the deposit by the deadline.
3. The seller opens the tenders, usually with their agent, and chooses one.
4. Acceptance completes the exchange. Both parties are bound, and completion follows on the date written into the contract.

Because each tender is a signed contract with a deposit, a bidder who wins can't renegotiate or walk away without the consequences set out in the contract. Unsuccessful bidders get their deposits back. The seller keeps the right to accept any tender or none.

Formal tenders need everything ready up front, and bidders have to spend money on legal checks before knowing whether they've won, which can put some off. They're used less often than private treaty or auction. The main difference from an auction is that bids are sealed: no one sees the others' prices, and each buyer has to decide their best figure alone.

How does an auction work?

At a traditional auction, lots are offered in a room, online, or both, with a published guide price and a confidential reserve. The legal pack is available before the sale. When bidding reaches or passes the reserve, the auctioneer can sell to the highest bidder, who signs the sale memorandum and pays the deposit, under the RICS Common Auction Conditions. Completion is 20 business days later unless the special conditions set another date.

Two variations matter for sellers:

• Online timed auctions work the same way legally when they are unconditional. The "hammer" is the end of the bidding window.
• Conditional auctions, often sold as the modern method of auction, don't exchange on the day. The winning bidder pays a non-refundable reservation fee and gets a set period to exchange and complete. Traditional auction vs modern method of auction sets out the differences.

Our walk-through of how a land auction works covers the timetable in detail, and selling land at auction: pros and cons sets out the trade-offs.

What does each method cost the seller?

The fee levels vary by firm and by lot, so compare quotes in writing. The structures differ in when you pay.

Under section 18 of the Estate Agents Act 1979, agents and auctioneers must tell you, before you instruct them, when you'll owe them a fee and how much it is or how it's calculated. The RICS consumer guide to property auctions lists what an auctioneer's terms should cover, including commission if the lot sells before the auction, at it, or after it, by the auctioneer, by you, or by anyone else. Check the same point in any agency agreement: sole agency and sole selling rights terms decide whether you owe a fee if you find the buyer yourself.

For the auction route in more detail, see what it costs to sell land at auction, and for private sales, agricultural land selling fees.

Which method suits which land and seller?

No method is right for every lot, and an agent, auctioneer, or RICS-registered valuer who has seen your land is better placed to say what will work. These are the points sellers usually weigh.

The land itself pushes the choice too. Tenanted land sold subject to an Agricultural Holdings Act 1986 tenancy or FBT attracts investors who are comfortable with any method. Land with hope value may draw promoters who want an option or conditional contract, which only private treaty easily allows. Small lots such as paddocks are often sold by auction or private treaty, because the cost of a formal tender pack is harder to justify on a low price.

How is selling land in Scotland different?

Scotland has its own law of property and its own process. The main differences:

• Offers through solicitors. Buyers note interest and make formal written offers through a solicitor, often at "offers over" a stated price.
• Closing dates. When several buyers are interested, the seller can set a closing date, a deadline for written offers. According to mygov.scot's guidance on closing dates, the seller doesn't have to accept the highest offer, or any offer. A closing date works much like an informal tender.
• Missives. The contract is formed by an exchange of formal letters between solicitors, called missives. Under mygov.scot's guidance on offers, once missives are concluded the deal is binding, and pulling out after that can mean paying damages.
• Registration and tax. Title is registered with Registers of Scotland, and the buyer pays Land and Buildings Transaction Tax to Revenue Scotland rather than SDLT.
• Auctions. Scottish auctions run under articles of roup, with the auctioneer known as the judge of the roup, and the winning bidder signs a minute of preference that binds them on the day. The RICS Common Auction Conditions apply to England and Wales.

Wales follows English law on contracts and conveyancing, so the four methods work the same way there. The difference is tax: buyers of land in Wales pay Land Transaction Tax to the Welsh Revenue Authority, not SDLT.

For Scottish farmland specifically, see our guides to agricultural land in Scotland and buying farmland in Scotland.

Can you change method part-way through?

Yes, within the terms you've signed.

• Private treaty to tender. If several buyers are interested, an agent can switch to an informal tender or a closing date to bring them to a decision.
• Offers before an auction. Auctioneers commonly pass on pre-auction offers, and a lot can be sold before the auction day if the seller agrees. Under the RICS consumer guide's checklist, your terms of appointment should say what commission is due if that happens.
• Selling after an auction. A lot that doesn't reach its reserve can often be sold straight afterwards by negotiation, and the auctioneer's terms will usually say whether they're entitled to a fee on a later sale.

Check any sole agency or sole selling rights clause before moving the land to another agent or method, because it decides who is owed a fee.

Next steps

Start with the facts that decide the method: title, occupation, any agreements on the land, and how much a fixed date matters to you. Selling land at auction: pros and cons covers the auction trade-offs in more depth, and our guide to how to sell agricultural land covers the wider process.

AgLand doesn't recommend a method or value land.