Do you go to Auction , Private Treaty or Sale by Tender ?
We can help you in your dealings with the Real Estate Agents by Providing
Solid, Factual Information with this Comprehensive Report.
Auction versus Private Treaty or Tender
Sales by private treaty and auctions are the methods most widely used in selling property in Australia. Recently the third option of selling by tender is also gaining in popularity.
When you have made your decision to sell your property, your real estate agent will sit down and discuss with you the sales process options and you will need to carefully pick the method that will work best for your specific needs and situation. You should also take into consideration the cost that each method will incur and how effective each method is likely to be.
A reputable real estate agent should take your particular circumstances and the market into consideration before dispensing advice on the methods of sale. One of the first things you can do yourself though, and it is important , is to establish just what your property is worth. This can be done quickly on line here at http://homevaluationguide.net.au/best-agent-to-list-my-house-or-unit-for-sale/ Establishing what the estimated selling price for your property is as well as the current market condition goes into the mix to choose the best selling method.
Property Sale by Auction
Essentially a property auction is designed to create “price tension” by getting all the interested buyers to bid for the property at the same time , in the same place. In auction settings, the individual buyers place bids against each other. The buyer who wins the property that is put up for auction is the one who places the highest bid.Setting a reserve price for your property before the auction is essential and why we recommend that you independently obtain a valuation report before hand at http://homevaluationguide.net.au/best-agent-to-list-my-house-or-unit-for-sale/ The reserve price is usually arrived at just before the date of auction, you and your Real Estate Agent should reach an agreement on this based on the feedback and information gained from the open house and inspections. The reserve price will represent the lowest bid that you would be willing to accept for the sale of your home.
Often there is high demand for well-situated properties in popular urban centres. Property auction sales work best where there is strong competition from buyers. Cities such as Sydney and Melbourne are the most common locations in Australia for property auctions. Often over 60 % of sales are conducted by this method. An auction may lead to a bidding war amongst the buyers , with a very high level of energy. Successful sales will however arise when a realistic reserve price has been set and it is not way above the market. One good thing about auctions is that they always take place at a certain day and time. This enables you to have a predetermined, well defined period during which you will allow your prospective buyers to come and have a look at your property during an open for inspection. This is usually preferable to the majority of sellers as opposed to juggling time commitment of indefinite open homes with responsibilities of family and work life.
Putting your property for sale by auction means you understand how much time you need to showcase you property to get the greatest exposure from interested buyers and meet your sales objective. While a sale by contract on the other hand may potentially take much longer.
As soon as the winning bid is placed at the auction by a prospective buyer, and the auctioneer has banged down the gavel , the buyer is required to lodge a deposit , usually a percentage like 10 % of the sale price on the day. The beauty of the auction process is the certainty of the sale. The cooling off period is waived. This helps a great deal in making sure that buyers remain committed. In the prospective buyer raises any queries or concerns about the building inspection or any other issues, they are required to address these concerns before the process of auction starts. After the auction is concluded there is no recourse to these issues by the buyer.
One of the main drawbacks of this method of selling properties is that if the buyers fail to meet the reserve price, then the property in question does not generate a sale. This may be problematic due to the fact that although there is a possibility that a sale may be generated in the subsequent days after the auction, in some instances the amount you have used on marketing your property and auctioneer won’t result in a sale at auction. If you decide to sell by auction, you will want to take this risk into consideration, and make sure you discuss it with the real estate agent you have chosen. By using the Home Valuation Guide, it assists you to identify a good property expert in your local area.
Private Treaty as an option for Selling a Property
Selling your property by private treaty is the other common option. This method of selling differs from selling by auction in that here, a specific price for the property is set and the seller waits for the prospective buyer to either agree to an already set price or table a different offer.
Sellers who choose to use this method accept the normal conditions such as the cooling off period which is included in the contract. This takes place after the seller and the buyer have already reach an agreement upon an asking price and also other requirements, and have had the corresponding contracts signed. As soon as the contract is signed and all the normal conditions are met, the property is removed from the market and the buyer gets their opportunity to carry out the building inspection, secure financing, and obtain the council reports.
The council reports are usually related to zoning plans and permits and are obtained by the buyers as part of the process of conveyancing.
Specific sale requirements like the settlement terms and asking price will have been negotiated between the seller and the buyer. However, buyers can also make requests to make the sale contingent upon such factors as the sale of their own property, their capability to get building inspections and obtain financing. Due to this, there is always the chance that the sale might fall through during the cooling off period or the period agreed to satisfy such conditions.
Though the exact period of time to sell by private treaty will depend on the conditions of the market, a sale can take much longer compared to a sale by auction, and a lot of negotiations could also be involved. However you and your agent will get significant feedback on your sales price accuracy from the number of offers that you get. You may afford to be even more flexible with your pricing plan other than waiting for results of an auction to make adjustments.
keep in mind that you are usually expected to pay the marketing costs and real estate fees for both property auctions and private treaty sales. This does not make any of the two methods more cost effective than the other , except for the auctioneers costs. You will want to speak
to your real estate agent regarding what costs will be involved and also the current market you are in before you make your decision.
Selling a Home or Property by Tender
Sale by tender is a third option to secure a sale for your property. This involves the normal promotion and advertising of the property and the open inspections the same as the other methods. Where selling by tender differs is that prospective buyers are given a fixed date to submit their “best offer ” for the property to the selling agent . These are not disclosed to any other buyers , and often not seen by the seller until the date set for the closing of the tender period. It is a little bit like an auction in that the bids are expected to be final and any conditions clearly detailed . This allows the seller to assess the market demand for the property but not the obligation to sell. Often commercial properties are sold by this process , but residential sales are being seen more regularly now using sale by tender.
Selling methods Conclusion :
Using a licensed, qualified real estate agent that your are confident with and who knows and understands your specific area is the best choice. Sit down and discuss in detail all the pros and cons of the different selling methods as there can be quite a bit of stress and anxiety
during the process of selling a home. As has been mention before you can use the Home Valuation Guide reports for a property valuation as well as being able to obtain the services of a HVG property professional in your area. Good luck.