You have finally found the most perfect property. You have fallen in love with the house, land, and lifestyle that you could have – you have even visualised where your furniture will be placed. Although now you are faced in a bidding war against equally motivated buyers wanting to purchase YOUR property!!!
This is yet another challenging scenario that a Buyers Advocated is equipped to deal with!!!
Remember that sometimes we need to remove our emotions and be realistic about the pricing, and not over paying for a property despite other buyers interest.
Your Buyers Advocate can negotiate through the common four methods of sales whilst ensuring that their client’s best interests are constantly and the forefront of each decision. Purchasing property through these various methods of sale each have their own advantages and disadvantages. Making sure you discuss these options with your Buyers Agent to find which method you are comfortable with before “jumping in” is essential.
Should you wish to go it alone, keep these processes in mind and ensure that you seek your own legal advice applicable to your situation.
This can also be known as a ‘private sale’ – this selling method gives both the buyer and seller the most flexibility to negotiate price and purchase conditions.
Prospective buyers make offers on the property while the it is listed for sale and on the market. Private treaty sales mean you have the option of attempting to negotiate the price and/or other selling conditions with the owner’s real estate agent.
In Queensland, if the owner accepts your offer, there is a cooling off period during which you should perform any due-diligence on the property, such as securing home loan finance and having pest/structural inspections done.
In some areas, auctions are starting to become an emerging method of sale in Queensland behind our Southern States (NSW and VIC), giving you a chance to secure a property for a good price. However, this is dependent on low interest or competition from other bidders.
Most sellers will have set a reserve price – the lowest price that they are willing to accept for the property. If no bids are made at or over this reserve price, the property may be passed in– giving the highest bidder a chance to negotiate with the seller in private. In this event, you may have an opportunity to negotiate a sale with the owner (via the Real Estate Agent) and this may fall into a private treaty method of sale if conducted outside of the auction. Some things to consider with this method of purchase;
- You will need to register your bid on (or before) the auction day to participate as a bidder.
- Whether or not your offer is accepted by the owner will depend on a variety of factors – so it will help to do your research about how competitive the local property market is.
- Some contracts of sale allow part of the deposit to be paid at the end of the auction, with the balance payable on a specific date. Always check the contract of sale before you bid to ensure that you have the necessary funds to secure a property before you bid.
- Unlike private treaty sales, properties sold by auction have no cooling-off period, and you cannot negotiate the conditions of sale. That means you need to complete any due diligence inspections prior to auction day and have your deposit cheque ready at the time of sale.
Expression of Interest/Tender
These are both formal processes when a buyer is wanting to place an offer on a property with the view to purchase. The offer is presented in writing via a specific document EOI (expression of interest or tender document) which is then passed through the listing real estate agent and presented to the owner for review and consideration. Some things to consider with this method of purchase;
- Property price is not always advertised– you need to put your best foot forward in the first instance
- Buyers compete against one another by submitting offers, but neither party knows how much others are offering, similar to a silent auction.
- You will have no opportunity to increase your offer or change your conditions. Based on this process, properties are usually sold to the highest bidder.
Remember that your Buyers Advocate works in these scenarios daily. It is highly likely that they have built a rapport with the listing Real Estate Agent and Auctioneer over their career. Whilst no “special deals” can be done, it is certainly appealing that the relationship forged between these parties can ensure that communication, commitment and deliverance on a successful outcome can be achieved.