Auction or private treaty? How about some different ways to sell
Most sellers are familiar with the system of private treaty.
This is the most common sales method in WA and is based on advertising the property at an asking price and then negotiating with the buyer, through the agent, to secure the sale after some old-fashioned haggling.
This is done using the REIWA offer and acceptance form. Once the seller accepts an agreed price and conditions the transaction can proceed to settlement.
A second option however, is to sell by auction.
Although not as common in WA, auctions can be a good way to flush out the more serious buyers after a shorter marketing period and some buyers find them more convenient. A successful bidder, having reached or surpassed the reserve price, must be able to provide a 10% deposit at the fall of the hammer.
A third option to selling your property is to invite offers by a specified date. This is historically known as a tender process but also goes by other descriptions such as expressions of interest, set date sale or end date sale.
Expressions of Interest might sometimes indicate a price range whereas set date and end date sales usually don’t disclose price.
With these particular methods a property will generally be on the market for four to six weeks to allow potential purchasers to view it. If they are keen to buy, the agent will ask them to submit either a formal written offer or written expression of interest.
If you’re selling you should discuss with your agent your desired conditions of sale, including price, settlement date, whether you will entertain finance conditions and inclusions and exclusions of the sale.
Normally these submissions will close on a specified day and all potential purchasers are encouraged to put forward their best and final submission.
After submissions close the agent will discuss them with you. If you choose not to proceed with any of them you can place the property back on the market.
If you’re a buyer submitting an offer, ask if the seller can accept the offer at any time or only at the end of the defined period of time. If making an offer you must not submit any offers for other properties.
If selling, ask your agent what method they propose to use and for what reasons. For each method it might be helpful to ask to see the evidence showing how each method reduced the days on market and improved the selling price in a particular area when compared to other options.
If buying, clarify what it is you are required to submit. Is it an offer that can be accepted by the seller, and therefore becomes a contract, or are you merely expressing an interest?
DAVID AIREY is president of the Real Estate Institute of Western Australia. This article was originally published on reiwa.com.