Is auction the best way to sell your home?

Given the strength of the Adelaide real estate market, auction is proving to be an increasingly popular method to achieve a premium price.

While auction can deliver spectacular results in a hot market, some properties could be better suited to other methods of sale.

Here are the pros and cons of different selling methods:

AUCTION

Auction is a powerful method of sale for properties likely to attract significant buyer interest.

The campaign is condensed and highly focused, with a scheduled ‘sell date’ (usually three to four weeks after launch).

An auction sale is unconditional and there is no cooling-off period. The highest bidder is committed to the purchase and must provide a suitable deposit immediately (usually 10 per cent, though this can be varied if both parties agree).

An auction can create significant competition and excitement. Buyers’ emotions can often come into play, creating the potential for an offer well beyond the vendor’s expectations.

Toop&Toop boasts some of Australia’s premier property auctioneers who regularly achieve premium results on auction day.

BEST OFFERS BY

These campaigns require buyers to put forward their highest and best offer by a fixed date.

Setting a deadline for offers - usually three weeks after the property is listed - creates a sense of urgency, while providing an opportunity for those who cannot bid under auction conditions.

Buyers may offer a higher price in exchange for amended terms of sale, such as a delayed settlement, or lesser deposit.

‘Best offers by’ is ideal for vendors who are seeking a relatively quick sale yet are open to offers that may have conditions attached to them.

PRIVATE TREATY

A Private Treaty sale offers more flexibility than other methods.

The property can be advertised with or without a price or a price range can be provided.

There are also no time limitations or deadlines. It may take days, weeks or months.

Private Treaty is ideal when there is high level of confidence around the property’s value and there may be several comparable properties on the market.

When executed correctly, this is a very effective and powerful method of sale.

TENDER

Sale by tender carries similar conditions to auctions, with no cooling off period and the requirement of an agreed deposit.

This sale method is usually reserved for high-end properties or unique properties with an indeterminable market value.

The anonymous tender process ensures buyers do not base their offer on those of other buyers but rather on their own perceived value of the property.

This can result in higher-than-expected prices as buyers are unaware of the offers of their competitors.

Selling by tender also gives the vendor increased control. They are not obliged to accept an offer and do not need to make snap decisions like those often required at auction.

Unlike auction, the tender process is unlike to create emotional bidding.

TOOP+TOOP