Understanding Methods of Sale
Once a price guide is determined it’s then time to decide on the most appropriate method of sale. The most common methods of sale are listed below:
Auctions are a very popular method of sale, as the owner is in control of the process and sets the terms and conditions of the sale. Prospective buyers participating at an auction must be in a position to sign an unconditional contract with no cooling off period and pay a 10% deposit.
The auction date is set at the point of listing and the marketing and viewings are compressed neatly into a specific time period, usually 3 - 4 weeks. Prior to the auction and after consultation with your sales consultant, the reserve price will be set. This price will be determined after your sales consultant has thoroughly reviewed the market climate and buyer feedback. It is important to note that offers can be made and accepted prior to auction.
Auctions are an increasingly popular way to sell. They encourage a sale within a specified time frame so you can plan ahead. They also create more competition and a sense of urgency. There is no upper price limit with auctions, but there is a deadline, usually after your property has been heavily marketed for around four weeks. Peter Blackshaw Real Estate pioneered property auctions in Canberra, and has more experience with auctions than any other local agency. Our auctioneers are highly trained and have won multiple industry awards.
For Sale (private treaty)
A property is listed for a specific price, and offers are then called for. Once a prospective buyer places an acceptable offer, the process commences to exchange a contract. Generally for a prospective buyer to obtain formal finance, an independent valuation on behalf of their lending institution will be required. There is no specific time in which prospective buyers are required to place offers. This process will allow the owner to consider multiple offers.
Some properties sell better by private treaty, or sale at a price. Sale by private treaty can lead to excellent results and has the following advantages:
- there is no deadline
- you nominate the asking price, based on the market research you have conducted and based on the market research provided by your agent
- it is a straightforward process
- it may make you feel more comfortable if you are not in a rush to sell.
Expressions of Interest (EOI)
This method of selling invites prospective buyers to place a formal offer on your property within an advertised time frame. Contracts should exchange within a 24 - 48 hour period after an unconditional offer is accepted. Similar to an auction, the contract is unconditional, not subject to finance and does not allow for a cooling off period. The main difference to an auction is that the offers are made in private, so effectively the marketplace is unaware of the number of offers placed and to what price level.
This process can work very well for unique properties, or those which may be challenging in assessing the market value. Unlike an auction, there can often be a significant variance in the offers made and the sales consultant can further negotiate before the owner accepts an offer.
Sale by tender is a registration process where prospective buyers are required to submit an offer in the form of a signed unconditional contract, accompanied by a deposit prior to the closing date. The owner will then have the opportunity to select the offer that best meets their requirements.