The best sales method for your property
The sales method you use when selling your property can have a crucial impact on the result. We highlight the three main selling methods so that you can decide which one will work best for your property.
On average, a sales campaign for Australian property is between 21-30 days, with the highest level of interest seen in the first 1-2 weeks. With Australian real estate currently in high demand, it is important to do proper research and consider how you will receive the best return on your investment. With guidance from your knowledgeable real estate agent, it is up to you and your agent to have a strong strategy in place before the property goes to market. An essential component of your strategy is confirming what sale method to use.
The three main sale methods have their pros and cons, so it is important to do your due diligence and understand what option would best suit your property. Below we outline the three main sales methods.
1. Sale by auction
Sale by auction is a great option that creates excitement with potential buyers to drive up competition. After extensive marketing, the atmosphere that a group of interested buyers create when gathered on a specific day and encouraged to place higher bids by the auctioneer is not only electrifying; it’s a great way to increase the property’s final sale price. A recent study found that 90 per cent of Sydney and Melbourne agents believe that you get a higher sales price through the auction method.
This method will typically follow five steps – appoint an agent, market and advertise, show the house, auction day, and final result. Each step is crucial in the success of the property’s end price. You must choose a real estate agent with incredible knowledge and expertise as it is their responsibility to deliver you the best result. A great agent will also ensure that every other step is completed to deliver the most premium experience for potential buyers.
2. Sale by tender
Typically, this method is reserved for unique and high-end properties with no clear price. The point of difference for sale by tender is that each offer made by a potential buyer is examined after a specific due date. With all the offers placed before them, the vendor can then decide if they will accept, negotiate or decline the offers.
Agents encourage potential buyers to place their highest bid from the beginning as you will not know what price other bidders have placed. This selling method acts much like a sale by auction, as it heavily relies on creating competition between potential buyers who are all encouraged to place their highest bid first.
It is crucial to have a strong marketing campaign for a sale by tender to be successful. If the campaign does not generate enough hype, you will pay much more on extra marketing materials and time as a purchase may need to go through a long negotiation process.
3. Sale by private treaty
The least thrilling method of the three is also the most common in the Australian market. The sale by private treaty is where the property will go to market with an asking price. Interested buyers then have to submit their offers or start a negotiation.
This method is ideal for those who do not like the fuss that comes with an auction, you will also have more control over how to negotiate with potential buyers, and you can save money as you will avoid the costs associated with auctions. However, it is common that prices offered through this method rarely go above the asking price. Therefore, you need to be incredibly confident in your real estate agent, clearly understand the supply and demand in your local area, and be sure of your asking price.
For more information and advice on the best sales method for your property, reach out to your local Hockingstuart office or agents today.