Methods of Sale

When it comes to selling property, emotion rules! Establishing exactly what you want, and why, from the very beginning will assist you to choose the best method of sale for you. So what do you really want?

There are three things that remain consistent when it comes to deciding to sell. They are:

  • PRICE - best/premium price.
  • URGENCY - a quick sale.
  • PRIVACY - as little inconvenience and publicity as possible.

Ranking these three things in order of importance will help you, and your agent, establish the best marketing campaign, and method of sale for your situation.

Ray White’s experience confirms the two most successful, and popular, methods of sale are private treaty (for sale) and auction. In fact, both can, and do, yield excellent results when accompanied by the right marketing campaign and skillful negotiation by the agent.

You should choose the method best suited to your personal requirements. Also, look at the types of buyers in your area. Ask your agent to compare the success of each method. There is likely to be a trend for one of them, which may help you achieve greater success.

 

Private Treaty

Your property goes onto the market with a predetermined asking price agreed between you and your agent, based on market analysis. In most cases and markets, this price, or a guide to it, is publicly stated. In some others it is not.

There is no official sale date. Your marketing strategy may vary in the use of some, or all of the tools at your disposal, depending on your individual situation, budget and time frame. In some cases you may wish to utilise the agent's buyer database only, and rely on the negotiation skills of the agent. In more competitive markets, you may require a more targeted promotional strategy.

Your agent may still recommend inspections through regular ‘open homes’, and will discuss the options for your marketing strategy to spotlight your property in the marketplace.

Potential buyers will either accept the predetermined price or, more likely, start by making a lower offer. Your agent will handle the negotiations, which will be aimed at raising the offered amount to your predetermined price, or possibly higher if more than one buyer is interested.

This method of sale is effective in the long term, and targets buyers who want to visit properties in a specific price range. It allows you, the seller, to assess market interest in a calm atmosphere, and make any adjustments to your campaign and sale price that seem appropriate.

It is attractive to those buyers who feel they are more likely to succeed in getting the property at a better price rather than bidding in the competitive atmosphere of an auction, where they could also risk spending more than they’d intended.

 

Some considerations of this method include:

The predetermined price will generally turn out to be the maximum paid, or the basis of lower offers.

The open ended time frame can result in the property being on the market for a longer time, increasing advertising costs. Note: if your property is on the market for a long time and has several price reductions, it may give buyers the idea there is something about it that makes it hard to sell, which is why a good promotional campaign can be very important.

 

Auction

Auctions are highly focused marketing campaigns designed to expose your property to the maximum number of buyers, maximise your sale price, and minimise the number of days your property is on the market.

Your property is put up for sale on a specified date, and this is preceded by a high impact marketing campaign and selected ‘open days’, all of which indicate your commitment to selling.

The contract of sale is on your terms, and the conditions of the sale are predetermined to suit your situation. The nature of the marketing campaign means that the agent will be able to give you regular feedback from buyers in the market, which will assist you in setting the reserve price.

The impending auction date can create a sense of urgency and ‘call to action’ amongst buyers. You are not obliged to accept an offer that does not reach your reserve price. You can, however, decide to negotiate with the highest bidder(s).

Auctions offer extra opportunities for the sale of your home because an offer can be made before, at, or after the auction. Once a sale is made, either by accepting an offer in writing before auction day, or at the fall of the hammer on the day itself, the buyer must pay a 10% deposit then-and-there, and at the same time execute the contract.

This method of sale puts a clear time frame on your campaign, and creates a competitive atmosphere on auction day that is aimed at letting the market determine the highest price for your home.

 

Some considerations of this method include:

The chance that some potential buyers will be excluded, in particular those who don’t want to risk losing money on the cost of building, pest and other inspections if they are outbid. (Not applicable in the ACT)

 

Some buyers may not feel comfortable with the competitive bidding involved in auction. Auction attracts serious buyers as they know the owners are serious about selling.

 

By marketing without a price, buyers can judge the property on its merits, rather than on how the price compares to other properties on the market.

 

Pricing Strategy

Getting the best possible price for your property, and selling it sooner rather than later, is no doubt the result you want. No matter which selling strategy you use, you will need to consider both your pricing strategy (marketing with a price, price range, or no price) and your price expectations.


These decisions will be dependent upon your individual circumstances, including your property type and location, and your time frame for the sale. It is very important to have a realistic price expectation for your property – a price based on the market rather than your needs.


Don’t confuse how much money you need with how much the market will pay. You and your agent will discuss your expectations in detail. Here are some thoughts that will help you to be realistic and objective when determining your price.


Step outside yourself for a moment and see your home or property through the eyes of potential buyers. How does it compare with other properties in your area that have sold recently, or are currently for sale?


There are a number of factors that will affect the value of your property and the eventual sale price, apart from its physical features. You should consider these when discussing your sale price and/or reserve with your agent.

1. Recent sale prices of similar properties in your area.

Look in the local papers, attend some auctions, ask your agent, and conduct a property search on raywhite.com.

2. Similar properties currently for sale in your area.

If yours is the only four bedroom home or two bedroom unit for sale in the area at the time, you can expect competitive offers and a healthy return. If there are other properties like yours, you may need to consider how to make yours more appealing.

3. The strength of your marketing campaign.

The more buyers you can attract to your home, the more chance there is of creating competition, and achieving a higher price. Your agent will have ideas for a comprehensive marketing campaign for your home, including signboards, internet, direct mail, and local advertising. Your agent should also have a comprehensive buyer database, be highly active, and have a good reputation in the area. Your individual marketing campaign will be designed to promote your property to the market, and will be based on your individual requirements.

4. Type of buyer/reason for purchase.

First home buyers or young married couples may not be able to afford as much as well established second home buyers. Investors will be looking for a certain price point from which they can make good returns, and are less likely to be emotionally involved in the purchase. Again, developers may have deeper pockets than those seeking a home to live in, but will also be wary of the purchase price, as they will have a focus on redevelopment costs and resale values.

5. Personal.

It is important to note that an individual’s personal desire to own a particular property will impact on the price they are prepared to pay for it.


The impact of these issues should be discussed with your local Ray White agent, who has experience in the needs of different buyers, understands your marketplace, and can give you a list of recent comparable sales. It’s important that you remain in control, so do your own research and begin to form your own opinion of market demand, and the value of your property. Once you have an idea, you can call in an agent for further discussion. You will soon become aware of those agents who try to ‘buy your listing’ by promising unrealistic market prices.


An agent should show some recent comparable sales in the area to back up their opinions. Your local Ray White agent will know exactly how your home compares in terms of location, style, condition and age, size, living features and inclusions, with others in your area. Your Ray White agent will aim to sell your property at a premium price based on current market demand.

Choosing your agent

The selection of an agent to sell your property is one of the most important decisions you will ever make.

The ‘ability to talk’ does not make a successful real estate agent. It’s the ‘ability to listen’ that makes a great agent. When selling, choose an agent who asks you questions so that you know they understand your particular needs and circumstances. Make sure they have listened to your answers, and base their recommendations on what you have said. Also look closely at the strength and reputation of the network behind the agent. The office's policies, it's local profile, and it's ability to gain referral leads, are all important considerations.

It is also important to ensure that the agent will be a good negotiator. One good test of their negotiation skills is how they handle their agency appointment negotiations with you. If they cave in to your requests for a commission fee drop too easily, they are not likely to hold your price up when negotiating with prospective purchasers.

A commitment to service is also a trademark of long-term successful salespeople. You can recognise this quality not only from testimonials, but also from the agent’s willingness to guarantee their service. Every responsible real estate agent has a week-by-week program of service for controlled listings. You may decide that you would rather not have as much contact, but that is your choice, not that of the agent.

In summary, look for an agent who is:

  • Positive.
  • Enthusiastic.
  • Well-presented.
  • A good listener.
  • A good negotiator.
  • Committed to excellent service.

 

To find your local Ray White Agent click here.