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How do you know which Method of Sale to choose?
If you’ve been thinking about selling your home, you might be pondering over which method of sale is right for you. Or perhaps you’re not even sure what the choice is. We’ve helped so many people over the years sell their beautiful homes using all of these methods, and there are pros and cons to each of them. It really comes down to personal choice, what you want to achieve, how long you’re prepared to wait, and how discrete you want to be.
The three methods of sale are:
Private treaty / Expressions of Interest
Private Treaty / Expressions of Interest
Depending on how the market is behaving, this is a very popular method of sale in NSW. You, as the homeowner, work with the agent to set a price or a price guide for your property. This is then advertised for the length of time the home stays on the market, allowing potential buyers to view and make an offer. Every time an offer is made to the agent, the agent has to bring that offer to you to discuss. If you decide to accept it, then the sale goes ahead.
There is no pressure for you to accept an offer you don’t want. It’s entirely up to you and you can keep the house on the market if you’re not satisfied with what’s been brought to the table.
This allows the buyer a standard cooling-off period where they can finalise funds, obtain any reports or inspections, speak with a surveyor, and make sure they’re 100% sure.
We see this more commonly when the property type is in high supply.
The need for advertising for sometimes long periods of time is not ideal when you want to be discreet about the sale of your home.
Setting the price may underestimate the market value, unlike an auction which is more likely to show what the absolute latest market value is.
No set time frame which means there is a risk that the property will be on the market for an extended period.
These are increasingly popular, especially when the market is picking up or very busy. The auction date is usually set 30 days from when the property has gone on the market which creates a sense of urgency. There is a lot of work that goes into advertising and marketing as we need to entice buyers to want to find out more and take the time to come to the auction; so that on the day, there are lots of serious bidders.
The sense of urgency often achieves the best results for the seller. Only having the property on the market for a short period really drives the urgency – and the competition.
By not disclosing a price beforehand, you promote more competition amongst the buyers as they try to make the most competitive bid.
You are given three chances to sell the property; before the auction, at the auction, and after the auction. Potential buyers can make offers early but they have to be very compelling to stop an auction, we would recommend around 10-15% over the price guide.
This can be a stressful process as there is a lot of unknown. It relies heavily on there being a lot of interest prior to the auction which requires a lot of promotion. If the interest isn’t there, the auction day could be unsuccessful.
It may put potential buyers off as they feel like they’ll pay over the market price on auction day.
There is no cooling-off period which can put some potential buyers off.
Not very discreet as advertising and promotion is needed to gain interest.
This may also be referred to as by tender. And it works in much the same way as the tender process works in the corporate world. We set a closing deadline and buyers submit their offer and any conditions by that date. Then you as the vendor will choose which one is most suitable. This is a popular method with our clients as it allows discretion and privacy.
You’re not obligated to accept any of the offers until the right one comes along.
You have more control over the timeframe and the price the property is sold for.
Potential buyers often make higher offers than expected to try and beat the competition.
Not advertised on the market so you have full privacy and discretion.
It could take a long time to find the right buyer and the right offer.
The final price may not be as competitive as if you were to sell by private treaty or auction.