Methods for selling residential property
There are two main alternatives when selling residential property. They are sale by Private Treaty (For Sale) and Public Auction. Each offers advantages and your choice will depend largely on your property, the nature of your sale and your market’s current dynamics.
When selling by Private Treaty, you set a price before your property is listed for sale. While many people initially feel more comfortable with the idea of setting a price, there are a few things to consider.
You’ll need to firstly determine a realistic asking price. This, in itself, is a difficult process as the true value of any property is what the market is prepared to offer. If a property is under-priced, it will sell quickly and the price cannot be maximised. If you overprice your property, it may sit on the market for a long period and run the risk of becoming ‘stale’ or being overexposed.
While this method seems more relaxed, there’s also less incentive for buyers to negotiate, complete enquiries and move quickly to complete their purchase. Buyers are sometimes tempted to use the absence of a time limit to their advantage.
We have an excellent knowledge of recent comparable sales in your area and will assist you to arrive at a realistic price and marketing strategy for your property, if you select this method.
Auction An auction, buyers bid against each other to purchase your property. It is the preferred method of sale for beneficiaries, governments, banks, administrators, executors and trustee companies, corporations and, of course, private vendors.
If the highest bid at auction is acceptable to you, the sale occurs at the fall of the Auctioneer’s hammer. The property is ‘passed-in’ if the highest bid fails to meet your reserve price.
Our in house award winning Auctioneer - David Forrest For the owner, auctions have several benefits including:
- Competitive bidding – You enjoy a position of strength as buyers compete against themselves instead of you.
- No pricing issue – You have the benefit of several weeks of market feedback before setting your reserve. Because there is no advertised price, strong demand can sometimes result in a sale price above expectation.
- Three opportunities to sell – before, at auction or immediately afterwards.
- Tight timeframe – Buyers have a set timeframe to work towards, usually three or four weeks. This focuses your buyers’ attention and provides the incentive for finances and building inspections to be completed in time for auction day.
- Unconditional contract – You get a cash contract where you dictate the terms and conditions.
- No cooling off – A sale made under the hammer is definite and there is no cooling off period.
- We have a very experienced auctioneer who has won many awards and competed at the highest level of the industry in international competitions. If you are going to auction your property make sure you get the best auctioneer you can!
There are other systems of marketing available. These are by tender or expressions of interest, which are only used very rarely and usually for special properties. This type of marketing also has its advantages and disadvantages and usually used for properties that have special value.
Let’s discuss these alternatives to determine what best suits you.