Selling your home is a big decision, but even after you choose to put your home on the market you still need to decide on the best approach.
There are two roads you can choose to sell your home:
Both these options are very different and may have different results, not just for your property price, but also for the terms of sale, selling costs and the time it takes to sell your home.
Understanding these differences and what is involved is really important for getting the best result for what you need. Make sure you have your selling goals outlined early so you can discuss these as part of your selling conditions with your potential real estate agents. That way you can come up with the best possible outcomes together, taking everything into account.
The big deciding factors are any timelines you are under, so if for example you have already signed a contract on your next property and need to settle by a certain date, as well as any financial goals you need to have met to cover your debts.
Auctions are much more dramatic, noisy and public ways of selling property. There is a lot of tense emotion and things move at a rapid pace. For this reason, you are most likely to see auctions showcased in reality TV home makeover shows.
Like private sales, an action is handled by a licensed real estate agent who will appoint a professional auctioneer to attend your property on auction day to oversee and call the bidding. While you can opt to conduct the auction at the real estate office, usually the auction is held on-site.
All your property documents must be on display prior to the auction and usually, bidders have one last look through the property before the auction begins.
During this brief bidding time, which can be as short as 60 seconds or as long as ten minutes, registered bidders will bid in increments until no more bids are made.
Bidders can open the bidding at any amount but the sale itself is not considered official until the seller’s reserve price (lowest possible selling price) has been met.
A private sale is the traditional and widely popular home sale method. In this case, a real estate agent will discuss a viable property price with you and advertise this as part of the property listing. They will arrange to have comparable rates shown for similar property sales to justify their asking price. As soon as the property is listed, anyone interested can put forward an offer to the agent who will pass it on to the seller for their consideration.
With a private sale, some properties come with a set price while others will be inside a price bracket. It is not unusual for offers to be made above the higher bracket to secure a sale for a property in high demand. It’s up to the owner to check over applications and choose the offer they consider to be most advantageous. This can take into account a number of factors outside sale price including settlement terms, cash deposits, and cash sales—no finance required (or pre-approved finance only).
You may also hear a private sale referred to as a private treaty, there is no difference between the two.
There are a number of subcategories under these different sales methods including Openn Negotiation—which are private sales auctioned online, off-market sales, expression of interest, for sale by owner and private auctions, but typically it’s auction and private sales that are the two most successful, and popular choices for home sales in Australia.
The best person to talk to about your options is a qualified and experienced local real estate agent. Before you sign on with an agent, take the time to get to know them and their sales procedures as well as the costs. They’ll discuss your options as well as evaluate what the expected sales price will be for your property.
While there are a number of factors you’ll want to take into account, the two biggest are location and property type.
The auction capitals in Australia are Sydney and Melbourne. Most properties go to auction in these greater regions with phenomenal success because demand and competition are already high. Other state capitals as well as most regional and rural properties tend to do better in private sales because people have more time to discuss sales criteria, and prices and start negotiations.
The best properties for auction are those that are in high demand. The more competition and more interested buyers, the more likely a bidding war will take place, driving up prices and netting owners a great result. Properties that are in short supply, have unique attractive features and that appeal to a wide range of buyers are great for auction.
Who is your property suited for?
If your home is appealing to three or more different buying groups, an auction will be a great way to allow bidders to see other bids and choose how to respond in a fast and high-pressure environment.
Making the decision about how to sell your home isn’t one you need to face alone. Your real estate agent can assess your property features, compare it to other homes they have sold in the local area and help you make a decision based on current successful sales. It’s okay to take your time to decide which way to go and ask the agent questions that help you take into account all the associated pros and cons.
The rapid pace and uncertainty of an auction are not for everyone. A month of marketing campaigns comes down to ten to 20 minutes of haggling where you have no idea what the outcome will be. While it’s not for the faint-hearted, trusting in the expertise of your real estate agent and auctioneer will help calm your nerves. Also, be sure to discuss what happens next if your auction is passed in so you understand the overall time frames you may be facing for your property sale.
You can get around some of these issues by adding “unless sold prior” to your auction terms. This gives sellers the ability to take an attractive offer at any stage of the property sale, instead of waiting for the bidding to begin. This also allows buyers who don’t want to be involved in the auction a chance to make a high offer to take the property off the market.
Offering a home for private sale can achieve quicker results, especially if your property type is in demand. It’s possible to sell in days from listing in a hot market which makes it a great choice for those on a tight time schedule.
It’s appealing because sellers get a lot more choice over who they sell to and under what conditions.
You can counter these difficulties with Openn Negotiation which allows you to sell your property online - but under private sale rules. Bidding can start online as soon as the property goes to market. You can bring the auction date forward at any time as well as well at any time to any offer that comes in.
You can also increase your audience with an online sale as interstate as well as international bidders are welcome and all transactions and signatures can be obtained electronically, as well as E-conveyancing, to make the transaction smooth and seamless.
When making the decision on how to sell your home make sure you feel confident and comfortable with your choice. Talking to your real estate agent in-depth about your choice, and what happens long-term if the sale doesn’t go as planned, will help you understand the processes and make a solid decision that will work out for your needs.
Interview all your property professionals carefully to make sure you like who they are and what they do, from your real estate agent and banker through to your conveyancer, you need to have experts on hand you can trust to assist and support your property sale.
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