Many sales methods to be considered
If you are buying or selling a property for the first time, the sale methods and procedures can be mind-boggling.
Should you auction your property, or invite tenders? Should you handle the sale process yourself, or get someone to handle it for you? Should you advertise a price, or settle this by negotiation?
There are pros and cons to the various methods, and it is a good idea to familiarise yourself with them before putting your property on the market.
Auctions, which are becoming popular, have several points in their favour: n They provide an opportunity to maximise the sale price. n There is an unconditional sale on the vendor’s terms. n There is a pre-planned marketing programme to maximise the property’s profile. n The buyers compete against each other, rather than against the vendor. n The sale date creates a sense of urgency among buyers. n Objections to any asking price are ruled out.
On the negative side, buyers who are in a selling line, but can’t bid unconditionally on the sale day, may feel excluded.
Sale by tender – a popular method of selling rural properties, and of selling homes in some urban centres – also has positive aspects. n All buyers are eligible. n There is a pre-planned marketing programme to maximise the property’s profile. n The closing date creates a sense of urgency among buyers. n Buyers are expected to provide the best price and terms. n There is an opportunity to negotiate with buyers after the bidding has closed. n The eventual sale price remains private.
On the negative side, people buying by tender are not placed in an open-
Auctions can provide an opportunity to maximise the sale price. bidding situation. Each buyers may also have many conditions to satisfy.
Sale by negotiation is a popular method. No price is advertised, and is agreed on by the buyer and the vendor.
This option is sometimes chosen because: n It is a proven marketing method, with established negotiation guidelines. n As an asking price is not advertised, there is an opportunity to maximise the sale price. n It rules out the risk of over-pricing your property at the outset.
But because there is no fixed sale date, some buyers may feel there is no urgency to enter negotiations. Furthermore some buyers may reject the property immediately, in the absence of a sale price.
Another standard method of selling a property is through an exclusive agency listing with an advertised asking price.
This is favoured by some because: n A fixed asking price makes negotiating easier for the buyer. n There is a defined marketing programme. On the negative side: n There is a fixed maximum price. n There is no fixed sale date to create a sense of urgency.
Finally, there are people who prefer to sell their property privately.
Often this method is chosen to avoid paying agency fees.
Although there are several drawbacks to this method of selling, it works well for many people.
The drawbacks include: n There is limited access to buyers and advertising media. n There are potential legal difficulties. n Negotiating face to face with a buyer can be intimidating for some people. n Marketing can be inadequate. n Buyers may want a cut in the asking price that would equal an agent’s commission.