There are a number of sale methods you can choose from when selling your home. Your agent will take many factors into account when recommending the best method of sale for your property and circumstances.
Here is a simple guide to understanding the different ways to market your home.
Selling by Private Treaty
When your property has an asking price, buyers will respond by deciding whether or not the property is within their price range. Price is the main search criteria for web sites such as realestate.com.au and domain.com.au.
The advantage of private treaty is potential buyers clearly know the seller’s price expectations. The disadvantage of private treaty is some buyers will pre-judge the property based on price before they’ve even viewed the home.
A private treaty sale contract is usually subject to a building & pest inspections or finance approval.
Selling by Auction
An auction is held at a specific place, time and date following a marketing campaign of three or four weeks. An auction creates urgency as buyers must act within the defined time frame or risk losing the property.
When selling your home by auction there is no upper price limit, only a minimum amount which is called the reserve price; the home owner sets the reserve price prior to auction.
The advantages of selling by auction include:
- Cash, unconditional sale
- Shorter time frame to achieve a sale
- Potential higher price if competition between buyers
Once the hammer falls, the property is sold and the contract is not subject to any conditions, nor is there a cooling off period. If a prospective buyer wants to conduct a building inspections or arrange finance, they need to do these things prior to bidding at auction.
The only disadvantage of selling by auction is if there is not enough competition between buyers, the property may be passed in, ie. not sold on the day.
Tender or Expressions of Interest
Tender or Expressions of Interest is when you invite buyers to submit an offer to purchase your property by a specified time and date. For example, ‘Tender closes 5pm Wednesday 21st September’.
Expressions of Interest may include conditions such as finance or building & pest inspection, depending on the seller’s instructions.
Tender provides the flexibility of a private treaty sale and the urgency of an auction. Negotiations are done privately, so confidentiality is maintained.
After the initial offer is received (Tender or EOI) further negotiations may still take place to determine the highest price.
If you would like to discuss which method of sale is best for your home, feel free to call or email me at any time.