Have an apartment between Gold Coast & Broadbeach, apparently the market is pretty slow there.
Agent is strongly pushing for Auction & offers reasons for this against Private treaty as follows.
We offer the option of sale by private treaty or auction to our sellers and in this case, xxxxxx (principal Agent) recommends an auction campaign as the best approach to achieving an optimum price for your property. Given its features, we feel that removing the price will encourage more parties to enquire on the property and become emotionally committed to it. This emotional commitment is often what will allow your property to reach a higher than anticipated sale price. Changing the thought process of the buyer gets them thinking how far they need to go down in price eg. low offers, whereas in an auction they have to think how high up in price they have to go to beat the other buyers. The auction process also offers an expedient sales experience in many cases as we are noting that property sold by private treaty is in many instances sitting on the market for some 120 days with the changing economy. Please see the pros and cons below:
Sale by auction
• Sold in 30 days (less time on market)
• Cash contract – no finance clause stretching a minimum of 21 days
• No pest and building inspection – buyer must complete this before auction
• Creates competition (buyer against buyer)
• Opportunity to achieve a premium price
• Deadline for buyer to make a decision to purchase – cant keep waiting to see what comes on the market each week
• Creates urgency
• Advertising without a price widens the buyer net
Private Treaty
• Setting a fixed price where you can’t go up, only down
• Currently the average days on the market 120-160
• Generally all offers/contracts will be subject to at least 21 days finance with extensions required frequently
• Generally all offers/contracts will be subject to at least 7-14 days pest & building
• Buyers don’t have to rush to make a decision as there are no time limits imposed
• Conditional contracts are common at present: long settlements
• Buyers tend to judge the property on price before they judge it on its attributes
Not really pros & cons, all pros for auction all cons for private sale.
Also they are asking commission of 5% of first $18k then 2.5% on balance which I think is very expensive.
Can anybody offer advice?
Agent is strongly pushing for Auction & offers reasons for this against Private treaty as follows.
We offer the option of sale by private treaty or auction to our sellers and in this case, xxxxxx (principal Agent) recommends an auction campaign as the best approach to achieving an optimum price for your property. Given its features, we feel that removing the price will encourage more parties to enquire on the property and become emotionally committed to it. This emotional commitment is often what will allow your property to reach a higher than anticipated sale price. Changing the thought process of the buyer gets them thinking how far they need to go down in price eg. low offers, whereas in an auction they have to think how high up in price they have to go to beat the other buyers. The auction process also offers an expedient sales experience in many cases as we are noting that property sold by private treaty is in many instances sitting on the market for some 120 days with the changing economy. Please see the pros and cons below:
Sale by auction
• Sold in 30 days (less time on market)
• Cash contract – no finance clause stretching a minimum of 21 days
• No pest and building inspection – buyer must complete this before auction
• Creates competition (buyer against buyer)
• Opportunity to achieve a premium price
• Deadline for buyer to make a decision to purchase – cant keep waiting to see what comes on the market each week
• Creates urgency
• Advertising without a price widens the buyer net
Private Treaty
• Setting a fixed price where you can’t go up, only down
• Currently the average days on the market 120-160
• Generally all offers/contracts will be subject to at least 21 days finance with extensions required frequently
• Generally all offers/contracts will be subject to at least 7-14 days pest & building
• Buyers don’t have to rush to make a decision as there are no time limits imposed
• Conditional contracts are common at present: long settlements
• Buyers tend to judge the property on price before they judge it on its attributes
Not really pros & cons, all pros for auction all cons for private sale.
Also they are asking commission of 5% of first $18k then 2.5% on balance which I think is very expensive.
Can anybody offer advice?
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