There are many ways to sell your house however the 2 main ways are:
A) PRIVATE TREATY
When you sell your home by private treaty, you set a price and the property is listed for sale at that price. In general, the price is negotiable with the seller often asking a higher amount than they expect to sell the property for, and the buyer making an initial offer much lower than the asking price.
- The process of a sale by private treaty offers the following benefits:
- Greater control over the sale
- Time to consider offers by potential purchasers
- The ability to extend the time for which your home is for sale indefinitely
- Potential purchasers must make offers for your property ‘blind’, without knowing what other buyers think it is worth.
Selling privately is often just as tense as a public auction, and you will be faced with important decisions when you are presented with offers that are lower than your asking price.
There are risks with selling by private treaty which, also should be considered:
- If the price you set is too high, your property may not sell
- If the price you set is too low, you may miss out on maximising the selling price
You should also be aware that when a property is sold by private treaty, the buyer has a five-day cooling-off period during which they may withdraw from the sale.
To sell through an auction process, the amount you want for the property is generally not revealed to potential buyers who are encouraged to attend the auction and bid for the property against other potential buyers.
Auctions have become an increasingly popular way to sell or buy residential property, but before you decide to go down that path, do your homework and familiarise yourself with the process and what it involves.
Setting a reserve price
The reserve price is the lowest amount you are willing to accept for your property. Before bidding begins, advise your agent what you nominate as the reserve price. This is usually not told to the prospective buyers.
If the highest bid is below the reserve price, the property will be ‘passed in’. You will then either try and negotiate a price with interested bidders or put the property back on the market.
If the bidding continues beyond the reserve price, the property is sold at the fall of the auctioneer’s hammer.
The successful bidder must sign the sale contract and pay you a deposit on the spot (usually 10%). There is no cooling-off period for anyone who buys a property at auction. If the property is passed in at auction but contracts are exchanged on that same day, the cooling-off period still does not apply.
The fact sheet produced by the Office of Fair Trading covers the most common types of Listing Agreements. Please feel free to contact us if you require any further information.