Sales campaign methods
Choosing the right sales method for your property can be daunting as there are many points to consider.
Deborah Brady can recommend the method that will work best for your property and ensure you will achieve the highest possible sale price in the shortest possible time. The four popular methods of sale in Western Australia are private treaty, offers by closing date, auction and transparent negotiation.
PRIVATE TREATY (Set Price, Price-Range, or OFFERS FROM Price)
Selling by private treaty involves publicly listing and advertising a property at a set price, price range or an offers from a specified amount. Prospective buyers make offers on the property and the vendor accepts, negotiates or declines the offers. A strong marketing campaign with multiple home opens and targeted advertising complements a private sales treaty process. It is important to show your property in its best light to as many potential buyers as possible.
Advantages of a Private Treaty Sale
There are numerous advantages associated with selling property using this private sale method.
- Identifying the asking price in the marketing materials. This helps attract homebuyers who are looking for a property in a specific price bracket.
- Sellers have the option to either set a specific deadline or leave the sale date open. With no deadline, buyers feel less pressure to act immediately. It also allows new buyer to enter the market over the period of the campaign.
- Advertising the sale price creates a more open selling process. Buyers who may not appreciate the more competitive auction sales process may be encouraged to submit an offer.
Disadvantages of a Private Treaty Sale
- Without a specific deadline for the final sale, the selling process may be drawn out as buyers wait to see if something better might come along. In an auction or fixed date sale, by contrast, buyers are forced to make a quicker decision.
- It can be difficult to choose the right sale price. If the price is set too high, there is a danger that the property could sit on the market for a lengthy time period.
Auctions are becoming increasingly popular and common in Western Australia. When used to the right effect auctions can achieve a great result in a short timeframe. The sense of excitement and competition between buyers on auction day often means they outbid each other in order to secure the property which can significantly increase the price achieved.
Advantages of an Auction
- There is no price ceiling at auctions, which allows potential buyers to offer more than expected in some cases.
- You are in control of the reserve price so you only accept an offer which is acceptable to you.
- If your property is sold on auction day, the sale immediately becomes unconditional, which means a smoother road to settlement, no subject to finance or subject to sale.
OFFERS BY CLOSING DATE (Offers by Date)
Growing in popularity, offers by closing date basically works like a silent auction, a combination of both the private sale and auction methods. A home is usually marketed over four weeks and advertised with an offers deadline. Buyers can submit offers at any point of the campaign, which the vendor can choose to accept or wait till the deadline. If the vendor receives an acceptable offer, all registered buyers are contacted and asked to submit their best and final offer, which won’t be disclosed to any other buyers.
Advantages of Offers by Closing Date Sale
- A closing date creates a sense of urgency. Buyers must compete with one another as they would during an auction, which can drive up the final sales price in the spirit of competition.
- Potential buyers are not able to compare the property with similar homes on the market, because they don’t know what the seller’s price expectations are. This means that they may end up paying a higher price to the seller’s advantage.
- Although the vendor may not necessarily accept the highest offer presented, having this number in mind helps create a certain level of current market expectation for any further negotiations with buyers. This can facilitate negotiation after the deadline has passed.
- Buyers can make offers with conditional clauses attached. This could include offers contingent upon financial approval, or upon the sale of a secondary property. With the ability to attach these stipulations, the property for sale will be available to a broader range of potential buyers. The seller can then consider all of these different conditions to determine which will best suit their needs.
Openn Negotiation is a revolutionary way of selling real estate. It takes all of the best characteristics of Auction, Private Treaty and Closing Date sale, and blends them in to a fully interactive, fair, and totally transparent sales process. Open Negotiation creates the same sense of urgency and competition as an Auction – but without the public bidding process that can be unpopular among some buyers.
To participate in a Open Negotiation, buyers must first submit their purchase terms and conditions (via your agent) for you to approve. Common terms and conditions include settlement period, deposit amount, and whether they are subject to finance or subject to sale. Only buyers with their terms and conditions approved are able to participate in the Open Negotiation. If you decide not to approve a buyers’ terms and conditions, they will be given an opportunity to change them and re-submit them for your approval. A buyer cannot change their terms and conditions once you have approved them.
The Open Negotiation will take place on a nominated sale date. However, it is possible that a Open Negotiation may start before the nominated sale date if a starting price is submitted which you are happy to accept. During the Open Negotiation, you can either be in the office with the agent, or have the agent come to your home.
To start the Open Negotiation, the agent will notify all participating buyers of the highest starting price. The agent then calls each buyer individually to ask if they wish to increase their price. An SMS is then sent to all participating buyers advising them of the new highest price. The agent then calls each buyer in turn, and repeats this process until all buyers bar one advise that they will not proceed further. The successful purchaser is the buyer with the highest unchallenged price above your reserve price. You confirm the sale price by signing off on the buyer’s Purchase Price Negotiation Form which together with their pre-approved terms and conditions, forms the completed offer.
If the Open Negotiation does not reach your reserve price, the buyer with the highest price will have the first right to negotiate with you to purchase the property.
Advantages of Open Negotiation
· Open Negotiation puts the seller in greater control by giving them the power to approve only the terms and conditions that suit. For example, you may decide not to approve terms and conditions that have too long or too short of a settlement, low deposit, or have high levels of finance.
· Sellers know how many buyers will be competing for the property. This gives you confidence about how your property is performing and makes the whole sale process less stressful.
· There is no limit on the price that can be achieved with Open Negotiation, and having a nominated