With business and our day-to-day life still adjusting to its new normal, the real estate industry, investment economists, data analytics companies, and the media, in general, have reported growth and opportunity over this past year
The pace of capital gain has been tapering since April this year which can be attributed to growing housing affordability challenges along with less fiscal support. It is likely recent COVID outbreaks and associated lockdowns have contributed to some of the loss of momentum as well, particularly from a transactional perspective in Sydney which is enduring an extended period of restrictions.
Amongst all this, the real estate market did ignite this year, and there has been a new buzz in the air again. People have been excited about buying and selling; however, it is likely the rate of growth will continue to taper through the second half of 2021 as affordability constraints become more pressing and housing supply starts to lift.
If you are looking at Selling at any time, it is important to know the different ways to do so to maximise the highest potential sales price from this current climate.
No. #1 AUCTION
Auctions are becoming increasingly popular and a great way to sell. Particularly if there is a lot of interest in the property or unique features about the property, you cannot put a price on. When selling a property by auction, an advertising campaign and auction date will be established to create the greatest buyer interest.
The seller will set their terms and conditions and a reserve (being the lowest price they will sell the property at the auction). If a property is sold at auction, there is no cooling-off period, and the buyer must pay a deposit. The property is purchased as-is (generally with no subject to conditions, such as finance, building, or pest inspection approvals). This process is the most transparent for buyers and allows the opportunity for a higher selling price on the day.
No. #2 EXPRESSION OF INTEREST
An expression of interest sale is essentially a form of a closed, silent auction. The property is marketed with no list price, and buyers are invited to submit their highest & best offer in writing to purchase a property on/or before a nominated closing date & time.
This property sale process can attract a greater scope of buyers who cannot meet the strict auction conditions of a sale. Sellers are not allowed to accept any offer before the pre-specified deadline has been reached. Following the closing date, the seller and their agent will review the submitted offers based on price and the terms and conditions.
The main difference between an expression of interest and an auction is that offers are made private, and the buyer has one chance to submit their best offer. Effectively, the marketplace is unaware of the number of offers that have been placed or the expected price level. If the seller does not receive an acceptable offer, the property may be placed on the market as a private treaty sale, or Auction.
No. #3 PRIVATE TREATY – THE TRADITIONAL 'FOR SALE'
Investors can sometimes get confused when they see the terminology Private Treaty. However, it is simply a different way of saying the traditional 'For Sale.' This is where a property is listed and marketed for a specific price (E.g., $987,000), and then buyer offers are submitted to the seller. Once a buyer places an acceptable offer, the process commences of exchanging a contract. Generally, with a private treaty sale, the buyer will request finance, valuation, building, and pest inspection clauses to the contract. There is no sale deadline or timeframe; the process is generally straightforward, with minimal pressure of a deadline date, and allows a seller to consider multiple offers.
No. #4 DO IT YOURSELF DIY – PRIVATE SALE
Lastly, there is the option to sell a property privately. This is where the seller will not engage a real estate agent and sell the property independently. The seller becomes responsible for appraising, listing, and advertising the property, negotiating the sale with the buyer, and establishing the contract terms. While a private sale can be enticing to a seller, there is always the risk that the optimum conditions or maximum sale price are not achieved, resulting in lost property sale dollars/income or potentially the sale falling over if not managed correctly.
If you are thinking about selling or buying, we are here to assist, support, and guide you through the process. Contact us to talk through your personal needs with one of our friendly, knowledgeable, and professional team members.