Should I sell by Auction, Tender, Deadline or By Negotiation
The right method for selling your property is an important question and is one that an agent needs to consider carefully when guiding a property owner. If an agent sticks to one method of sale, it may mean that they haven’t thought through the selling method for your particular house and your particular situation.
Typically, in a hot market when buyer demand outstrips housing supply, you will see the method of selling via Auction spike. Critically you need to understand that Auctions aren’t necessarily suited to all properties and owners, and or all buyers. In the case of the buyer, this is because buyers are required to be in a cashed-up position to purchase a property and need to have done their due diligence on a property e.g. building inspection, prior to bidding at the Auction. Whilst the cost of an Auction can add up for a buyer, it places the owner in a prime position. When the hammer drops the sale is inevitably a cash offer. An Auction also means that the owner CAN’T put in any conditions on the sale like “the sale is subject to the owner finding another property to purchase”.
So, if you are needing to put in a ‘condition’ Auctions aren’t always practical for a property owner wishing to sell, and if you are a buyer needing some conditions on the sale, an Auction may not be right for you either.
This then brings us to the 3 other methods, Tender, Deadline or By Negotiation. The critical element that you need to know, is that when selling via one of these methods, the Real Estate Agent needs to be skilled in 2 competencies: (1) Skilled in guiding buyers on the indicative sale price (2) Skilled in Negotiation skills to increase not only the price but improve the conditions offered. This means negotiating to get a buyer to remove some of the conditions to make the offer more favorable to the owner.
In contrast, an Auction is clearly driven by the activity in the Auction room, so the more people in the room, this improves the potential for a good sale price. Agents therefore indicate a property’s lowest price so that buyers will attend the Auction. The more bidders the higher the likelihood of achieving a great price.
The other 3 sale methods means that the buyer has to put in their best offer, and it is up to the agent, under the instructions of the owner, if they wish to negotiate with the offers. Agents under these methods need to have an understanding of the sale statistics and must always be gathering buyer feedback from open homes. For this reason, it’s important that an agent calls all buyers back after an open home.
You probably know that not all agents are created equal. No owner want to engage an agent who is an ‘order taker’. You want an agent who will negotiate with buyers for the greatest outcome but still maintain a sense of ‘win-win’ for both buyers and sellers. A good negotiator should never leave a buyer feeling like they have just been forced to overpay for a house purchase. Both buyer and seller need to feel happy with the outcome of the negotiation, and those buyers who missed out need to feel that they participated in an ethical process.
Please contact me, if you would like to discuss the right selling method for you.
Linda worked for Scotwork Negotiating Skills, the world’s largest provider of training and workplace assistance in negotiation skills. She has trained global organisations and some of New Zealand’s leading businesses in how to negotiate. Linda put’s these skills to good use in achieving great sale prices for homeowners.
Disclaimer - This is a opinion piece written by Linda, and is not the opinion of Ray White.
Typically, in a hot market when buyer demand outstrips housing supply, you will see the method of selling via Auction spike. Critically you need to understand that Auctions aren’t necessarily suited to all properties and owners, and or all buyers. In the case of the buyer, this is because buyers are required to be in a cashed-up position to purchase a property and need to have done their due diligence on a property e.g. building inspection, prior to bidding at the Auction. Whilst the cost of an Auction can add up for a buyer, it places the owner in a prime position. When the hammer drops the sale is inevitably a cash offer. An Auction also means that the owner CAN’T put in any conditions on the sale like “the sale is subject to the owner finding another property to purchase”.
So, if you are needing to put in a ‘condition’ Auctions aren’t always practical for a property owner wishing to sell, and if you are a buyer needing some conditions on the sale, an Auction may not be right for you either.
This then brings us to the 3 other methods, Tender, Deadline or By Negotiation. The critical element that you need to know, is that when selling via one of these methods, the Real Estate Agent needs to be skilled in 2 competencies: (1) Skilled in guiding buyers on the indicative sale price (2) Skilled in Negotiation skills to increase not only the price but improve the conditions offered. This means negotiating to get a buyer to remove some of the conditions to make the offer more favorable to the owner.
In contrast, an Auction is clearly driven by the activity in the Auction room, so the more people in the room, this improves the potential for a good sale price. Agents therefore indicate a property’s lowest price so that buyers will attend the Auction. The more bidders the higher the likelihood of achieving a great price.
The other 3 sale methods means that the buyer has to put in their best offer, and it is up to the agent, under the instructions of the owner, if they wish to negotiate with the offers. Agents under these methods need to have an understanding of the sale statistics and must always be gathering buyer feedback from open homes. For this reason, it’s important that an agent calls all buyers back after an open home.
You probably know that not all agents are created equal. No owner want to engage an agent who is an ‘order taker’. You want an agent who will negotiate with buyers for the greatest outcome but still maintain a sense of ‘win-win’ for both buyers and sellers. A good negotiator should never leave a buyer feeling like they have just been forced to overpay for a house purchase. Both buyer and seller need to feel happy with the outcome of the negotiation, and those buyers who missed out need to feel that they participated in an ethical process.
Please contact me, if you would like to discuss the right selling method for you.
Linda worked for Scotwork Negotiating Skills, the world’s largest provider of training and workplace assistance in negotiation skills. She has trained global organisations and some of New Zealand’s leading businesses in how to negotiate. Linda put’s these skills to good use in achieving great sale prices for homeowners.
Disclaimer - This is a opinion piece written by Linda, and is not the opinion of Ray White.
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