Tips on different ways to sell your house with
Selling by Auction
- An auction by nature creates urgency as there is a definitive time in which the buyer must act or they risk losing their opportunity to buy the property. Setting an auction date, groups all interested buyers together at the one time, creating a competitive environment and the greatest chance to achieve the highest possible price. The theory of an auction is that your home will sell at true market value at that particular time.
- Unless the property is passed in and consequently becomes listed ‘for sale’, the seller knows exactly when a sale and settlement will occur. The benefit of this is being able to plan ahead with your next move.
- During the marketing campaign, buyers are usually given a price guide which can vary throughout the campaign depending on the amount of interest in your property and feedback received from buyers. The great thing about auctioning your home is that there is no price limit only a minimum amount that you decide you are prepared to sell for, which is called the reserve price.
- Setting the reserve should be an analytical decision based on buyer feedback obtained by your agent during the campaign as well as comparable sales in your area. By now you should have a good idea as to how many buyers are genuinely interested and how they feel about your home in relation to the price that has been quoted to them.
- The marketing undertaken for an auction property needs to be more focused and can often cost you more. A date is set and you need to create strong buyer interest in a short amount time. Your agent will recommend using a multi-faceted approach, whereby you advertise across a number of different mediums each week until auction day.
- Once the hammer falls, the property is sold and there is generally no cooling off period for the buyer or the seller. Buyers need to conduct building inspections and ensure their finance is approved prior to bidding at the auction. If the property fails to sell at auction, you can continue marketing the property with an asking price. It is likely that one of the buyers, often the highest bidder will come forward and negotiate a sale with the agent on your behalf
Selling by Private Treaty
- Sale by private treaty requires the seller to set a price from the beginning of the campaign. Your agent and our tips on Property Value can help you with this process. Many sellers have a tendency of initially setting a higher price as they think buyers are likely to negotiate the price down. Doing this can be counterproductive, so this is when an experienced agent becomes a vital source of information. Ask for their guidance when establishing your asking price and refer to comparable sales in your area.
- In general, sale by treaty gives the seller greater control over the sale, more time to consider offers by potential purchasers and the ability to extend the time the property is listed on the market (although this often leads to potential purchasers wondering why the property is not selling). Plus potential purchasers must make offers on your property ‘blind’, this means without knowing what other buyers are willing to pay.
- Generally, private treaty sellers can negotiate the price and sale terms with the buyer. Private treaty sales usually have a cooling off period (5 days in NSW, 3 business days in Victoria, 5 days in QLD, 4 business days in NT, 2 business days in SA ), this means that once a price has been agreed between buyer and seller, the sale is still subject to conditions. For example the buyer may have requested a building and pest inspection or may require finance approval.