Methods Of Sale

Auction

Advantages:

Unconditional offers: Requiring all offers to be unconditional means that buyers must have their finances in order and be fully committed to purchasing the property, reducing the likelihood of a sale falling through due to financing issues.

No-price marketing: By not listing a specific price, the property can attract a wider range of potential buyers and create a sense of competition, potentially leading to a premium sale figure.

Clearly-defined process: The auction process is structured and has strict milestone dates, which generates maximum competitive tension and can result in a higher sale price.

Mitigation of risks : Thorough preparation and planning, including setting a reserve price, ensures that the sales process is as risk-free as possible for the vendor.

Access to purchasers: The auction approach leaves no stone unturned when it comes to reaching potential buyers and encouraging their participation in the sale.

Ability to accept pre-auction offers: The vendor has the option to accept an offer prior to the auction, giving them more control over the sales process.

Transparency of process: The open bidding process provides social proofing for potential buyers, giving them confidence that they are paying a fair market price.

Confidential reserve price: The reserve price is set confidentially, ensuring that the property is only eligible for sale at the vendor’s chosen price.

Qualified buyers: Only qualified buyers are able to bid, which increases the likelihood of a successful sale on the day of the auction.

Disadvantages:

Public method of sale: An auction is a public method of sale where potential buyers gather at a specific location to bid on a property. Some purchasers don’t like a public method of sale.

Limited audience: Auctions may not attract as many potential buyers as traditional methods, as some buyers may be put off by the competitive nature of the process.

Price By Negotiation

Sale by Price By Negotiation (PBN) is a traditional method of sale where a property is marketed without a listed price. Instead, interested buyers are invited to make an offer based on their own assessment of the property’s value.

The lack of a listed price can generate interest and attract a wider range of potential buyers who may not have considered the property if a specific price was listed. This can create competition among buyers and potentially lead to a higher sale price.

Interested buyers are typically given a timeframe within which to make an offer, and these offers can be conditional or unconditional. If the vendor receives an offer that they are willing to consider, negotiations between the vendor and the buyer usually ensue to arrive at a mutually agreeable price.

This negotiation process can involve multiple rounds of offers and counter-offers until both parties reach a price that is acceptable. Once an agreement is reached, a contract of sale is signed and a deposit is paid.

Advantages: of PBN is that it provides flexibility for both the vendor and the buyer to negotiate terms and conditions of the sale. Additionally, by attracting a wide range of potential buyers, the vendor may receive offers that are above their expected price range.

Disadvantages: of PBN is the lack of a listed price can also lead to uncertainty and potential confusion among buyers who may not be sure how much to offer. It is important for both vendors and buyers to carefully consider the negotiation process and seek professional advice before proceeding with a PBN sale.

Fixed Price

A Fixed Price is a method of sale where a specific price is listed for the property, which is typically based on a professional appraisal or valuation of the property’s market value. This sets clear expectations for potential buyers from the outset and communicates the vendor’s expectation around price.

Listing a Fixed Price can attract a wide range of potential buyers, including those who prefer to see prices listed on properties. It also allows for prequalification of purchasers prior to enquiry, which can save time and effort for both the vendor and the agent.

Fixed Price also leaves no stone unturned in terms of access to purchasers and getting them to participate. Some buyers may opt not to work with no-price processes, so having a Fixed Price can help to ensure that all potential buyers are considered.

Advantage: of Fixed Price is that it allows for the vendor to accept an offer at any time during the process, providing more flexibility and control over the sale. However, it’s important to note that offers can still be conditional, meaning that the sale may not necessarily proceed until all conditions are satisfied.

Disadvantages: Fixed Price is that it may not generate as much interest or competition among buyers compared to other methods of sale, such as Auction or PBN. Additionally, if the property is priced too high, it may deter potential buyers and lead to a longer time on the market.

Deadline Sale

A Deadline Sale campaign is a marketing method where a property is advertised without a listed price and potential buyers are given a deadline by which to submit an offer. This method creates competition between buyers without price being the focus, which can result in achieving a premium price for the property.

One of the main benefits of a Deadline Sale campaign is that it provides a clearly-defined process with strict milestone dates to generate maximum competitive tension among potential buyers. This can create a sense of urgency and encourage buyers to submit their best possible offer before the deadline.

Another advantage of Deadline Sale is that it leaves no stone unturned in terms of access to purchasers and getting them to participate. The campaign can attract a wide range of potential buyers, and the vendor can accept offers at any time during the process if they are compelling.

Additionally, Deadline Sale does not discourage purchasers who dislike pressure and may wish to offer prior to the campaign close. This provides flexibility for both the vendor and the buyer to negotiate deals at any time during the process.

Furthermore, a Deadline Sale campaign can help to mitigate risks to the vendor during the sales process via thorough preparation and planning. The campaign can be tailored to suit the specific needs of the vendor and the property, ensuring that all potential buyers are considered and that the best possible outcome is achieved.