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Methods of Selling

Methods of Selling

Auction Gavel

Selling by Auction


Auction is a way of selling property through an intensive advertising media designed to capture the maximum attention of buyers within a set time frame. The process is a means of purchasing/selling real estate through public negotiations to determine the true market value of the property at that time.

Auction is one of the few methods of sale where you get not one, but three opportunities to sell your property at three different stages of the process.


1. Stage One
In the lead-up period high profile Auction marketing will highlight your property, producing the greatest exposure when the enquiries are likely to be at the highest level.


2. Stage Two
The Auction is the shortest part of the process but it is the best opportunity to stimulate competition. Because most people think in a range of values, rather than a specific figure, this is the time when a potential Buyer is most likely to stretch to the upper range of values to secure your property, and therefore produce the highest possible selling price for you.


3. Stage Three
Some people believe that if your property has not sold by this stage of the Auction process then the system has failed. This is not so. Stage three can produce a whole new range of buyers, those who may need to sell another property or arrange finance before they can commit themselves unconditionally.


The Benefits of Selling by Auction:

•   Your property gains prominence through high profile marketing.
•   Your property obtains 'special project' status.
•   No price marketing - attracts a wider range of buyers.
•   Deadline Auction Day - creates urgency and a finite selling time.
•   More buyers see your property.
•   You receive more regular market feedback.
•   An Auction creates potential for a premium price through buyer competition.
•   You control the selling price with a reserve which ensures that your property is not under sold.
•   You choose the settlement date.
•   Your title is accepted by the Purchaser - an unconditional sale.


Why should you choose a Harcourts Auction?

•   People : When appropriate, our sales team will recommend an Auction. Under the guidance of an Auction Manager, our full-time residential Auctioneers are acknowledged as being amongst Australasia’s finest, and are supported by a complete in-house marketing department.
•   Profile : Your property will feature in our high profile media promotions. We are the largest real estate company in Australasia.
•   Performance : We have a proven track record, both in our auction rooms and on site.  We use the latest computerised audio visual equipment.


The Reserve Price

The "reserve" is the minimum figure that the Auctioneer is instructed to sell the property for. This figure is generally established as a result of feedback from interested parties during the marketing period and is usually set by the Seller prior to the Auction.


The Bidding Process at Auction

The Auctioneer will ask for an opening bid and will then nominate the increments by which the bidding can be raised. The successful bidder will be asked to pay the 10% deposit and sign the contract.


Selling before Auction Day

In most cases you can sell before Auction day. This is called a pre-Auction offer. A buyer may submit an offer on the REIQ Sale and Purchase Agreement. If this offer is acceptable to you, we will bring the Auction forward and all other registered buyers are given the opportunity to attend this Auction and bid. The bid will be opened on the amount you found acceptable. If someone goes higher it will sell at the higher price.


Bidding at Auction while someone still needs to get Finance

Because interested parties must be in a position to bid on a cash unconditional basis at the Auction, they are advised to organise through their bank or mortgage broker pre-approval to bid up to a price they are prepared to pay.


Bidding at Auction while still having a property to sell

There are two options:

1.   If they are in a sound financial position they may arrange bridging finance to cover any delay in settling their property.
2.  They may request a longer settlement date, giving them time to sell and to settle their property.


If the Property doesn't sell

If the reserve price is not reached, the property is passed in to the highest bidder. The highest bidder is then offered the first right to purchase the property immediately after the Auction at the Seller's Reserve Price. If a sale is not completed immediately following the auction, the property will be offered for sale to all other interested parties

Legal Advice : Before signing any agreements, both the buyer and seller should seek legal advice.


Selling by Negotiation

If you sell by negotiation, the property is placed on the market with an asking price, or "by negotiation"  (no fixed asking figure). Offers are invited from Purchasers who have inspected the property.

The Harcourts Promise to you is that all offers will be in writing, so the offer is drawn up by the sales consultant on the Real Estate Institute of Queensland Sale & Purchase Agreement. This offer is signed by the Purchaser and usually accompanied by a 10% deposit cheque.

The deposit is payable to the Real Estate Agent's Trust Account. The deposit is normally asked for at the time the Purchaser makes the first offer on the property and is a demonstration of the seriousness of the offer.

The offer may be either :
•  Conditional - having one or more conditions to be met within a specified period (eg subject to a
   cooling-off period, building inspection, pest inspection) 
•  Unconditional

The offer is then presented to you for your consideration.

If the offer is at an acceptable level, you will sign as acceptance and the sale is concluded. If it is not at an acceptable level, the offer may be counter-signed by you and presented back to the Purchaser for their consideration. This may happen several times until the price and conditions are satisfactory to both parties and a sale is concluded. At this point, the Sale & Purchase Agreement is dated, and the Agreement is forwarded to both the Sellers and the Purchasers solicitors.

The office will also provide copies of the completed agreement to the Seller and the Purchaser. They then have documentation of when the unconditional date and the settlement date is and of what chattels go with the property.

Normally the settlement date and the possession date are the same. The process by which a sale and purchase of property takes place is commonly conducted through Solicitors and involves the payment of the purchase price (less any deposit already paid) in exchange for the Certificate of Title, a Transfer Document, and a release of previous charges over the property. Keys to the property are usually either handed to the Agency or their solicitor at settlement, and be picked up from the sales consultant immediately following settlement.

Legal Advice : Before signing any agreements, both the buyer and seller should seek legal advice.


Selling by Tender

A Tender is a form of selling property through advertising media designed to capture the maximum attention of buyers within a set time frame. The process is a private and confidential means of purchasing/selling real estate to determine the true market value of the property at that time.

The benefits of a Tender:

•   Your selling process will produce a result that is both private and confidential.
•   Creates potential for premium price through buyer competition.
•   Creates a finite selling time for interested buyers who must act with more urgency.
•   Weekly market feedback to assist you in establishing the selling range of your property.
•   Allows the Seller to be more flexible with the terms and conditions of the sale, e.g. you choose the
    settlement date.
•   Your property gains prominence through high profile marketing.
•   No price marketing - you are never limited by an asking price that is too high or too low.
•   Extensive use of open homes during a planned timetable allows easy access for buyers.

The offer can by be conditional, however an unconditional, cash tender will always be more attractive and the tenderer is advised to organise finance prior to submitting their offer.

There are three options where someone can submit a tender while they still have to sell a house:

•   They may make a tender conditional on the sale of their property.
•   If they are in a sound financial position they can arrange a bridging loan to cover any delay in settling
    their property.
•   They may make an offer on an unconditional basis but with a longer settlement date giving them time
     to sell and settle their property.

Legal Advice : Before signing any agreements, both the Seller and Purchaser should seek legal advice.