Selling by private treaty
The majority of properties in Victoria are sold by private treaty. This means that you offer the property to the market and invite offers from interested purchasers.
Sales by private treaty generally allow greater flexibility for negotiation. For instance, a contract can be signed ‘subject to’ certain conditions such as a building inspection or finance approval. There is also a three day ‘cooling off’ period applicable to properties sold by private treaty which commences after the contract is signed by both parties. This type of negotiation is often important for purchasers so do consider this when deciding whether to sell by auction or private treaty.
When offering a property for sale by private treaty you have the ability to vary the price whilst it is on the market and you will also have the opportunity to consider each individual offer from potential purchasers.
Expressions of Interest (EOI)
Another option to selling your property is to invite offers to purchase by a specified time and date. This is typically called For Sale by Expressions of Interest (EOI).
In these instances, your property will generally be on the market for 4-6 weeks to allow potential purchasers to view the property. If they are keen to buy, we will ask them to complete an Expression of Interest.
Expressions of Interest will close on a specified day and time, and each potential purchaser will need to put forward their best and final offer (in writing). As well as a price that the purchaser is willing to pay, conditions of sale will also need to be added to the offer, including settlement dates, finance conditions and inclusions and exclusions of the sale.
After EOI’s close, we discuss these with the vendor. It’s important to know that an offer will only be shared with the vendor. It will not be disclosed to any other party, such as other purchasers.
If a purchaser is putting in an offer, they need to remember that they may only have one chance to secure the property, so they are asked to put their best foot forward so they’re not disappointed later on.
If an acceptable offer is not found by the purchaser, the property may be placed on the market as a private treaty sale or EOI’s may be called for again.
Auction: Selling by Auction
It’s worth discussing with us whether auction is suited to your property.
There are many advantages to selling your property by auction:
- Auction is a three pronged marketing push. You may be able to sell your property before auction, on the day of auction, or in the event the property is passed in, directly after auction.
- You are able to set the reserve price, settlement date and any other terms, to suit you.
- The auction process creates a sense of urgency, buyers have a definite timeframe in which they must act. Buyers see other purchasers rather than you, as competition. Auction creates a competitive environment.
- With sale by auction, all contracts are unconditional and no cooling off period applies.
The first step in selecting the right auctioneer is to choose someone with a proven track record and knowledge of the particular area. This is where Shawqi Ein is the right choice.
You have the right to set the reserve price, so you can be assured that the property can’t be sold at less than this price. Consult with us when setting your reserve price as are familiar with recent sales of similar property in the area. Remember to be realistic when setting the reserve price, bearing in mind supply and demand in the area as well as other general market considerations.
Sale before the Auction
It is not uncommon for interested buyers to make offers on properties prior to auction day. In such a case we will discuss the offer with you, and a decision is made to either consider the offer, or continue with the auction as planned.
In the event you wish to sell your property prior to auction, we will invite all potential buyers to also make an offer. The most appropriate offer is then accepted by you, and contracts are signed prior to the auction date.
What will happen at auction?
There are several possible outcomes at the auction:
- If the highest bidder reaches or exceeds the reserve price the property is sold and the we will have a binding contract between the purchaser and the vendor signed.
- If the highest bid has not reached the reserve price we will usually ask for the vendor’s instructions before passing the property in.
- By announcing that the properly is ‘on the market’ (often declared when the reserve price has been met) often encourages further bidding.
- If the highest bid does not reach the reserve price and the property is passed in, then we will negotiate with the highest bidder and try encourage them to pay the reserve price.