The 4 main ways to sell property.
There are four main ways to sell property in Australia: private treaty, auction, expression of interest and off-market. While auctions and private treaty sales are popular options, deciding which method to use depends on your circumstances, such as how quickly you need to sell and how private you want the sale to be.
When it comes to selling each method has its benefits and drawbacks, so it pays to understand each of them when deciding which sale type will work best for your situation.
The most common sales method in Australia is private treaty, whereby the property goes to market with an asking price, and interested buyers submit their offers to start a negotiation.
This method is ideal for those who do not like the idea of an auction or want to avoid auction costs, and it also gives vendors more control over any negotiations with buyers.
However, the price obtained through this method rarely goes over the initial asking price, so you need to be sure your home is priced correctly. The key to a successful private treaty sale is using an experienced agent who not only understands local supply and demand but who is also a strong negotiator who can secure you the best deal.
An auction is a transparent sale method whereby potential buyers compete in real-time to buy a property for the highest bid, with participants able to see each other’s bids.
The atmosphere at an auction generated by buyers competing for a property is not only electrifying; it is also a great way to increase its sale price. If the vendor’s reserve price is not met and the property fails to sell, the agent can then further negotiate with bidders to secure a post-auction sale.
A survey of over 1000 Sydney and Melbourne real estate agents by auction by Gavl found that 90 per cent believe a higher sales price is achieved by auction, making this their preferred method.
To achieve the best result at auction, you need an agent with extensive local knowledge and expertise who can conduct a sophisticated sales campaign to maximise buyer desire for the property on auction day.
Expression of interest (EOI)
Expression of interest (EOI) is typically used for prestige homes, development sites and other one-of-a-kind properties which may be difficult to price or only appeal to a niche audience.
EOI entails buyers submitting an offer by a deadline, and which meets any requested conditions (e.g. settlement period length). Offers are then reviewed by the vendor who opts to accept, negotiate or decline them.
This sale type relies heavily on creating competition between buyers who are encouraged to place their best and final offer in what is effectively a silent auction, allowing the vendor to determine the interest in their property before committing to a dedicated sales campaign.
An increasingly popular sale type, the off-market method invites qualified and highly motivated buyers to inspect a property and make an offer before it is formally listed.
In this case, the vendor is willing to sell if presented with an acceptable offer but does not want to advertise that they’re selling. As such, an EOI sale often appeals to high-profile vendors or those facing financial difficulty, a relationship breakdown or the sale of a deceased estate.
Details of the sale are communicated to a limited number of buyers through off-market listing platforms or buyer’s agent networks, giving the vendor more control and reducing sales and marketing costs.
An off-market sale helps gauge market interest and price expectations, and if a property fails to sell, the property can then be listed with a well-informed price expectation.
While there is no one size fits all solution when it comes to selling, your real estate agent should be able to recommend the best method based on your circumstances. To discover the right type of sale for you and your property, speak to your local Belle Property agent today.