When it comes time to sell your property, you may think it will all be relatively straightforward.
But with so many options when it comes to different sales methods, you may wonder why your agent has chosen one method over the other.
Different sales methods work in different markets and different regions.
While an auction may work for a run of the mill house or apartment in your city, if you live in a more historic property for example, an auction may not be the best method of sale.
Then again, if character and historic homes are what the market is looking for, your agent may choose to test the market with an auction.
Sale by private treaty
For such a long-winded name, this is the standard and most popular way to sell a home here in Australia.
This is where a home is put onto the open market with a defined price or price range, and the agent runs a marketing campaign surrounding the sale of the home, which often includes online advertising, signage, open homes and email campaigns to potential buyers on their list.
Some home owners may have a contract presented within days while for others, it could take months to sell.
The length of time to sell by private treaty can depend on several factors including price, location, style of the property and interest in the area.
One of the main advantages of selling by private treaty is that with a specified price or price range, you are weeding out the buyers who can’t afford in that price range and hitting buyers who are looking either in or above the price range.
Interest in the property may be less, but you will find buyers who are more serious about purchasing.
Are you wondering why you aren’t selling even though you’ve followed the agent’s advice of selling by private treaty?
Homeowners are often reluctant to either drop their price or take the property off the market for a month.
They feel that someone will fall in love with their home and see the same value in it they do. This may happen, but it could take many months to do so.
If you don’t have the time to have your property sit on the market for months and months, it’s best discussing any pricing concerns with the agent, and listening to their thoughts.
Auctions are becoming increasingly popular in certain markets and in some cities.. This sales method is particularly useful in markets that are in high demand or for a style of property where there is a lot of competition.
They generally tend to tell the true value of a property as potential buyers will only bid an amount they feel the property is worth.
Generally, there is a short one month marketing campaign. Because the time frame is short, you might find your agent wishes to conduct more open homes to give the opportunity for more people to come through the door.
Your agent will likely ask for feedback from those attending open homes, and this feedback will generally be around what the potential buyer thinks of your property compared to what else is on the market.
These questions will allow the agent to help you set a reserve price.
Auctions are based around the hope of a number of interested buyers showing up and competing with each other to obtain the best price.
A big advantage of this method is that with no listing price, you may find buyers will come through the property, fall in love and try to find the extra money they may need.
The downside is that due to specified dates for auctions, you may find some potential buyers drop off the radar before auction day.
It is well worth speaking to your agent and working out whether it is worth accepting offers prior to auction if there seems to be the interest.
Online auction or group auctions
While this area is growing in Australia, it is an option you may like to discuss with your agent as another option.
If you’ve chosen a large well-known agency, they may like to run off-site group auctions where they auction a number of properties in the one day, generally from a conference room.
This means that potential buyers who may not have seen your property before suddenly become viable and interested buyers.
The other area that is growing, particularly with interstate investors, is online auctions. In this scenario, buyers connect into the auction virtually via mobile or computer, or they may have someone bidding on their behalf.
Online auctions allow you to reach a wider audience of potential buyers.
Remember, there are numerous sales methods your agent can suggest and if you are wondering why your sales agent has suggested one sale method over another – ask.
They should have no problems in explaining their reasoning and providing you with examples of the differences between the various sale methods.