So you’ve decided to sell your property and you’ve chosen an agent to work with – in my opinion these are two of the most challenging decisions you’ll make – and the sales process hasn’t even started yet! But there are still a few more decisions to make before you get close to the finish line, including selecting your method of sale.

I’m not going to even try to disguise my preference; in nine out of every ten campaigns I work on, I will recommend taking the property to auction. I guess that is understandable, I am an auctioneer, working on behalf of clients who are typically selling properties within 10 kilometers of the CBD. But I will get back to why that is relevant a bit further on… 

Looking objectively at the different methods of sale, there are a number to be considered and each have valid benefits. Every property, location and selling situation has its own individual requirements. So here’s a round up of each sales method:

Expression of interest

During an Expression of Interest (EOI) campaign, buyers may view your property at regular open for inspections, or at private appointment times. Buyers are advised of a closing date, by which time they need to have finalised their interest in your property and provided their best offer. While different to an auction, a competitive forum may still develop during an EOI campaign as offers are conveyed and private negotiations can begin in earnest.

Off market

An “off market” sale enables you to sell your property discreetly, without any advertising or publicity. Your neighbours don’t even need to know! Your agent will use their database of pre-qualified buyers and match their criteria to your property’s attributes to find prospective buyers. Sellers are able to consider offers from buyers as they are received and then enter into negotiations to reach a mutually acceptable sale price.

Private sale

Selling your home or investment through the private sale method can sometimes lengthen a sale. Keep in mind the objective is still the same. You need to market the home as you would every other home. The biggest difficulty you face with a private sale is how to come up with asking price. Too high and it doesn’t sell, too low and you miss out on a better sale price. The greatest difficulty you may find is the lack of urgency of the buyers.

Auction

An auction brings prospective buyers together to bid on your property with the highest bidder buying the property (subject to the reserve price being met). Common reasons for sales by auction are:

-Traditionally wider publicity attracting a larger audience

- Competitive bidding, which means there is no ceiling on price. A definite sale is made (assuming the reserve price is reached)

- Regular open house inspections

- Maximum exposure for maximum market impact

- A set date of sale encourages potential buyers to act quickly

- Identifies most likely buyer to negotiate with, if not sold on fall of the hammer

I would never discount any other method of sale, and of course the client always makes the final decision. So why do I keep coming back to auctions being the most successful sales method? A recent example of how an auction can effect the price of real estate was on show when we recently auctioned a prestige apartment in the affluent and prestigious suburb of Toorak. We had a sworn valuation of $1.8 million which was the basis for the reserve price at auction. With an opening bid of $1.8 million the fireworks went off and when big egos compete with buyers with big cheque books the results can sometimes be remarkable. The eventual selling price of $2,710,000 a massive $910,000 over the reserve and the sworn valuation. Proving undoubtedly that auctions, when conducted professionally, can truly make a difference if hundreds and thousands of dollars to the vendor.

Finally, the mechanics of an auction environment, together with the services of a dynamic and engaging auctioneer, heighten competition and emotion – and this can often be an intoxicating combination!