Many sales meth­ods to be con­sid­ered

Manawatu Standard - Property Weekly - - Property Weekly -

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.

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