New Methods of Selling Property Emerging
Over the last few years, we have seen an abundant range of methods of selling property come into the market place. Private treaty has traditionally been the main method of selling in Western Australia in comparison to our east coast counter parts who have favoured auction as their main form of selling.
The newest method introduced in WA includes a technology based method using an app which is called ‘Transparent Negotiation’ whereby the purchaser must register, submit their terms and conditions and bid for the property with other bidders in an open forum.
Other selling methods include set date sale, tenders, offers, and prices from $. Auctions are also now becoming more commonplace in the Perth market.
So, ‘what is the best method to sell my home?’ is a common question I am asked. The answer is that all of these options have a place, but it is very dependent on the property and the market in which you are selling.
I’ve not doubt I will attract some criticism here, but I believe some real estate agents are too focused on a quick outcome and opt to use a method that will condition their sellers to what’s on offer early in the process. This can mean that potential purchasers are left out of the buying process.
Sale by auction is a great process when we know there is a ready pool of buyers, and often a tight market with low stock, and they will compete for the property. Our Advisory team have seen several great outcomes resulting from recent auctions in City Beach, demonstrating that this process has worked well. Where we see the auction process fall down is in markets which are more over-stocked or the property may be a little different and requires a wider and longer marketing period in order to attract the right buyer.
The Transparent Negotiation is a similar process – we have had heard mixed reviews regarding this new method. There have been some good outcomes, but also some not so good. Once again, this method is reliant on competing purchasers to drive the price higher, if they aren’t there, it is likely to not give the best end result. Feedback has also shown that registering within the app is time consuming.
The process which has ‘offers from a certain figure’ is also becoming increasingly popular. This can work by attracting a wider buyer audience, but it can also set a benchmark price. Our research has shown that there have been agents stating the ‘offer from’ number very low and hence this practice has drawn fines from the ACCC for misleading and deceptive conduct. Done correctly, it can be a useful method in a rising market where an agent is unsure of the upside of the property’s value.
Set date sales are also an interesting option. Once again, this method aims at drawing buyers into a date by which time they must submit their offer to purchase. Again, this is very property and market specific and the negative aspect for this is the lack of buyer price guide given in the process. It can however work well with competing buyers and yet fail miserably when this doesn’t happen.
So which is the best selling option in my opinion? Well my view is that they all have their place, however it all comes down to understanding how your property will be perceived in the market and how your specific market is performing. I would also be very wary of any real estate agent who only pushes one form of selling method and can’t provide good reasoning as to why it should be that way. Agents are taught selling techniques to make the process deliver a quick result and this does not necessarily give the best outcome for their seller. It is critical to appoint an agent who adopts a wide variety of selling methods and has a full understanding of your property’s individual characteristics and how it will be viewed by the market. Combined with an understanding of the micro real estate market in which your property sits, this will give you the best chance of success.
If you would like to discuss the various selling options for your property in more detail or any other aspect of buying and selling property, contact Rod Davidson, LMW Director.