Ex­pres­sion of in­ter­est ex­plained

Whitsunday Times - - REAL ESTATE COMMERCIAL -

HAVE you ever won­dered why agents put a fixed price on some prop­er­ties and auc­tion or ask for an ex­pres­sion of in­ter­est on oth­ers?

Real es­tate pro­fes­sional Dan Dwan, manag­ing di­rec­tor of Col­liers In­ter­na­tional Toowoomba, said: “There are many ad­van­tages in mar­ket­ing a prop­erty with­out a price”.

“This can oc­cur ei­ther through an Ex­pres­sion of In­ter­est Cam­paign (EOI) or by putting the prop­erty to auc­tion.

“Both meth­ods have proven to achieve bet­ter re­sults for the sell­ers, quicker com­pared to sale by pri­vate treaty.”

An ‘Ex­pres­sions of In­ter­est’ (EOI) cam­paign is of­ten sug­gested by agents when there is a like­li­hood of achiev­ing a greater sale price if there is the op­por­tu­nity for in­ter­ested par­ties to in­tro­duce con­di­tional terms to the pur­chase process.

Such terms might in­clude terms sub­ject to Devel­op­ment Ap­proval or Ma­te­rial Change of Use for the prop­erty.

This could also in­clude terms such as raising fi­nance or the abil­ity to es­tab­lish a new en­tity suit­able for a SMSF. Auc­tions are con­ducted on an un­con­di­tional ba­sis.

“Dur­ing both an EOI and auc­tion cam­paign, the agent mar­kets the prop­erty with­out a price in­di­ca­tion,” Mr Dwan said.

“Dur­ing an EOI cam­paign, po­ten­tial buy­ers are in­vited to sub­mit their pro­posed terms of pur­chase, usu­ally on a pre-pre­pared form pro­vided in the prop­erty In­for­ma­tion Me­moran­dum, where they can out­line their of­fered price and any con­di­tions prior to an ad­ver­tised dead­line,” he said.

“The ad­van­tage of an EOI cam­paign is that it takes pric­ing out of the hands of the ven­dor and gives an in­di­ca­tion of the true price point from the mar­ket of the day and pro­vides in­stant feed­back, sim­i­lar to an auc­tion but with­out the added hype.”

Mr Dwan said the dif­fi­culty with EOI cam­paigns is that some buy­ers are un­fa­mil­iar with the mar­ket or the process and are not sure how to make an ef­fec­tive of­fer.

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