Cars are manufactured identically “off-the-press” and their price is consistent when they hit the showroom floor.
Properties, on the other hand, are unique.
They have their own personal features and additions, such as a distinctive outlook, backyard, balcony, fireplace, and so on.
Even if it’s wedged in a row of townhouses, it will have its own traits, like a garden, ducted air conditioning, or a new kitchen that its neighbours can’t brag about.
Thus, there are no hard and fast rules to selling a home.
The selling strategy you employ has to be tailored to your property and the local market and choosing the right one can make the difference between a top sale price and a disappointing settlement.
One of the biggest questions is whether to choose auction or private treaty sale or something in between.
Which option is right for you?
1. First, understand your market
Do buyers in the area respond with more enthusiasm to auctions or to private sales?
Certain demographics, particularly young buyers looking for their first home, will likely be intimidated by the auction process and prefer to stay in the safety of a private treaty sale, where they have time to deliberate and withdraw if necessary.
Knowing who will be the likely buyer of your property can help you understand which sale tactic will yield the best results.
2. Understand your propertyIs your property one of a million units in an apartment complex?
Or is it on a tree-filled half-acre block, loaded with charm and old-world character?
Properties that stand apart and have unique personalities often do well at auction, where the exact worth of the home is difficult to pinpoint because there’s nothing else quite like it.
Assess the property’s desirability – is it in a highly sought-after area where competition at auctions is high?
Alternatively, if it’s a generic three-bedroom home in suburbia, you’d likely be better off opting for private treaty, rather than risking the property passing in come auction day because it doesn’t quite stand out from the crowd.
3. Understand your situation
The time pressure of the sale is a factor that could determine your selling tactic.
If you’re in a time crunch, an auction with a predetermined sale date might be the better option, but if you’ve got the time for a lengthier showcase on the market, a private sale may yield a better end result.
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If auction seems right…
Auctions create a sense of urgency amongst buyers and an emotionally charged bidding battle that can generate a lot of interest – and profit – on your property.
Choosing the right auctioneer is imperative since it’s their skills that will drive the bidding on the big day.
Watch your potential auctioneer in action before committing.
A successful auction must be underpinned by a solid advertising campaign.
The more people who know about your property, the more bidders you’ll have on the day.
If private treaty seems right…
A sale by negotiation gives you and your buyers the opportunity to negotiate on price and conditions, which can result in a resolution that suits both parties.
Sale via asking price is often viewed as the ‘safer’ buying opportunity by purchasers since it gives both parties time for consideration.
In the case of private treaty sales, the marketing campaign needs to bring as many buyers through the door as possible in the shortest amount of time, to increase competition amongst interested buyers.
A property that lingers on the market for too long can be perceived as a property to avoid.
Note: Setting an asking price above market value is a common and costly mistake.
It’s rare that a buyer will pay above market value without good cause – either they’re emotionally attached or the market is red hot – and your chance of being passed over for other, more appropriately priced properties is high.
The end result will be a reduction in price from your end, which signals to house hunters that there are flaws with the property.
And of course, you’ll have to keep paying ongoing advertising fees in the interim.
You may not have to overtly choose between the two standard selling options.
There are other tricks real estate agents might recommend depending on your situation, including:
- Concealing the market value. Using this tactic, selling agents will list the property without a price, inviting interested buyers to ‘make an offer’ by a deadline date. This can be a successful tactic during a slow market or for a property with some flaws that might be off-putting for buyers.
- ‘Offers over’ sales. Listing the asking price with the tag ‘offers over’ generates interest amongst buyers because the price seems initially low compared to the rest of the market. For example, a property worth $430,000 that’s listed as ‘offers over $399,000’ will attract a higher rate of inspections, interest and hopefully, offers. This type of advertising is now illegal in some states
- Riding out the season. A savvy real estate agent will know the slow seasons in the local area, and may suggest holding off the sale until properties on the market become scarce. This is usually the case for more generic homes that lack character drawcards.
Selling a property is about the bottom dollar, so it’s important to use the experience of a local real estate agent to establish your optimal selling strategy and ultimately deliver the best results possible for your investment.