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Methods of Selling

Private Treaty

Private treaty is when your property will be promoted with a predetermined price and you and the buyer negotiate privately for a mutually agreeable outcome. You may consider this option if you are not in a hurry to sell and are prepared to wait for a buyer willing to pay what you are satisfied to accept. This being the case you should consider the following:

  • Placing a price on your home is ultimately determining the maximum price in which you wish to receive as people will always offer less and very rarely offer more!
  • As a result of the unlimited time frame in buyers minds, there is little urgency placed on the sale of your home.  

Auction

Auction is a listing option where the property is put to the open market without a price and then sold to the highest bidder through public bidding. This agency is still an exclusive agency, however, the marketing procedures are very different.

An auction property will be sold to the highest bidder, usually subject to a reserve price set by yourself. The reserve is the lowest price that you are willing to accept to sell your property. The reserve is finalised just before the auction & delivered to the auctioneer in writing.

If the bidding does not reach the reserve, the property will be "passed in" and your property will be placed back on the market for the remainder of the exclusive agency. If the bidding does reach the reserve during the bidding, this means that the property is "on the market" and will be sold to the highest bidder.

The sale of property by auction is the most effective and successful method of achieving a premium price for your property in the shortest possible time.

This is achieved by:

  • An advertising program being an impressive demonstration of your commitment to sell. 
  • Marketing without a price attracts all potential buyers in the market. Buyers judge your property based on its features and benefits - not the price.
  • An auction date creates a sense of urgency to buyers but still allows them ample time to complete their own inspections & arrange finance. 
  • When the public sees an auction sign, it says "I am a serious, motivated seller."
  • On the auction day buyers can also see their competition, which creates competitive bidding exhausting market demand.

Time and time again Auctions are proven to be the most effective method of achieving the most the market will pay in the shortest time possible. High profile, regular feedback & cash contract with no conditions. The only method of sale where there's no cooling off period for buyers. Every prospective buyer will inspect the property, attracted by the marketing which highlights the benefits and not the price. Competitive bidding maximizes the price and a set date for sale ensures a sense of urgency amongst buyers. It also ensures that the property doesn't become stale in the marketplace i.e. is on the market for too long a period of time. When this happens, the buyers inspecting become fewer & the offers coming in are lower because of the perception that there's something wrong with the property.

Auctions work! Industry figures show that approximately 80% of properties sell as a result of an auction marketing program. Most people who have experienced a well run auction choose to auction again.

The main benefits being:

  • Marketing without a price attracts an unlimited amount of buyers
  • 3 opportunities to sell - Before, At and After
  • Attracts genuine buyers
  • Buyers know you are a genuine seller - urgency 
  • Cash, unconditional contracts
  • No cooling off periods
  • Set sale date and the must conduct all their property inquires prior to this date
  • Creates competition between buyers
  • The property is in a prime location and enquiry will be high
  • Does not set ceiling on the sale price
  • They can not judge the property on price, only on its merits
  • Massive exposure and profile to entire market
  • 92% success rate as opposed to 70% on exclusive listings advertised with a price

Benefits of marketing without a price:

  • The number one reason property does not sell is price! 
  • If the single greatest objection people have to buying property is price, it makes sense to remove it
  • Never again can anyone say it is "too dear"!
  • Never again can anyone say it is "not as good value as the one down the road"!
  • Buyers must judge the property on what it has to offer, not against price.
  • Price stops the buyers (the target market) from coming to inspect the property.

Tender

Tender is very similar to auction, with the exception that the property goes to the market for private bidding, not public bidding. When a property is put to tender, prospective buyers are invited to submit their bids, in writing for the client's consideration. All the bids must be submitted by a closing date.

When a property is put to market by tender, the seller is required to attach some terms and conditions of sale. These will include a close of tender date and a clause stating that the highest tenderer may not necessarily be the successful bidder. Once the tender closes, all the bids are opened and scrutinised by the seller and their legal representative.

The major difference between an auction and tender is that a tender is usually on the buyer's terms and conditions.

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