A good agent can take the hard work out of selling your home. Once you have decided that you’re ready to put your property on the market, you’ll need to choose the right selling process to suit your needs. Homeowners can choose to sell via auctions or in a private sale. There are pros and cons to selling property with a private sale, which is worth taking a closer look at before making any decisions.
It’s also vital to consult with a professional agent for advice during this important process. Since 2007, LocalAgentFinder has been connecting property owners with local real estate agents using a free, no-obligation online dashboard. To get started, register your property here!
What is a Private Sale?
One of the most traditional methods of selling real estate is with a fixed-price private sale, also known as a private treaty. In this type of transaction, the vendor will make their sale price expectations clear. The price is usually determined with the help of advice from an estate agent. There are many ways to help increase the chances of a successful sale.
For this to be a successful transaction, the seller must ensure that the price is the most accurate reflection of the current market value by comparing the property to similar types of homes in the area. The property can then be advertised using the seller’s choice of a marketing plan, and the seller can start accepting offers.
Once a house has been listed, prospective buyers can make offers without competition from other purchasers. It’s then up to the seller to choose whether or not to accept each offer or enter into a negotiation process. The real estate agent assists with the negotiation process should this occur, with the final price agreed upon in a written contract.
Advantages of a Fixed Price Private Sale
There are numerous advantages associated with selling property using this private sale method:
Set a clear asking price
Once an asking price has been advertised in marketing materials, this takes away the potential for further price estimation. This helps attract homebuyers looking for a property in a specific price bracket.
Option to set a deadline or leave the sale date open
Sellers have the option to either set a specific deadline or leave the sale date open. With no deadline, buyers feel less pressure to act immediately, which can be attractive to purchasers.
Transparent selling process
Advertising the sale price creates a more open selling process. Buyers who may not appreciate the more competitive auction sales process may be encouraged to submit an offer.
For assistance with marketing and negotiating your sale, you can turn to one of the thousands of agents registered with LocalAgentFinder. There’s no obligation or fee to sign up for this service, so register now.
Disadvantages of a Fixed Price Private Sale
Longer sales process
Without a deadline for the final sale, the selling process may be drawn out as buyers wait to see if something better might come. In an auction, buyers are forced to make a quick decision.
Lower purchase price
It can be challenging to choose the right sale price. If the price is set too high, there is a danger that the property could sit on the market for a lengthy period. A low listed sale price may result in the seller losing money when the property could have sold for more.
Sale by Deadline Private Sale
Another type of private sale to consider is selling a home with a set deadline. In the case of a deadline private sale, buyers must compete against one another to purchase the property in question within a specific time frame. This is done without the formalities of the tender process, with all offers turned in confidentially in sealed envelopes before the deadline expires.
Advantages of a Deadline Private Sale
As with fixed-price private sales, numerous advantages are also associated with a deadline private sale.
Increase asking price
A deadline private sale may be advantageous to the vendor because it creates a greater sense of urgency. Buyers must compete with one another as they would during the tender process, which can drive up the asking price in the spirit of competition.
Higher Purchase Price
With a deadline sale, potential buyers are not able to compare the property with similar homes on the market because they don’t know what the seller’s price expectations are. This means that they may buy property at a higher price to the seller’s advantage.
Manage advertising spend
The seller has the ability to control how much advertising is necessary, potentially lowering marketing expenses and costs.
Sets clear expectations
Although the vendor may not necessarily accept the highest offer, having this number in mind helps create a certain level of expectation for any further negotiations with the buyer. This can facilitate negotiation after the deadline time has passed.
Reach more potential buyers
Buyers can make offers with conditional clauses attached. This could include offers contingent upon finance approval or upon the sale of a secondary property. With the ability to attach these stipulations, the property for sale will be available to a broader range of potential buyers. The seller can then consider all of these different conditions to determine which purchase price will best suit their needs.
Now that you have more information regarding the pros and cons of selling property with a private sale, why not start the process by choosing to register your property with LocalAgentFinder?
Cooling Off Period By State
A cooling-off period is the period of time in which a buyer can cancel a purchase or sale after signing the contract before the settlement period is finalised. This period is set for buyer protection and gives the buyer an opportunity to review their decision.
Cooling-off periods vary from state to state within Australia, with certain states having no cooling-off period unless stipulated in the contract.
New South Wales & Queensland cooling off period:
Buyers have a five business day cooling-off period.
Victoria cooling off period:
Buyers in Victoria have a three business day cooling off period.
Western Australia cooling off period:
In Western Australia, buyers have no statutory cooling-off periods unless stipulated in the contract.
South Australia cooling off period
Buyers in South Australia have a two-business days cooling-off period unless agreed upon by the seller and buyer.
Tasmania cooling off period
Buyers have no statutory cooling-off periods unless stipulated in the contract.
Northern Territory cooling off period
In the NT, buyers are provided with a four-business days cooling-off period.
It’s important to understand what cooling-off period rights are applicable in your state when selling or buying property and any additional requirements for the sale to be legally binding.
You may also find the following related articles interesting:
- Auction or Private Treaty
- Photography Tips for Selling your Property
- Marketing – What are the Options when Selling your Property?
FAQS:
What is the difference between a conditional offer and an unconditional offer?
A conditional offer is an offer to purchase a property that includes certain conditions, such as the buyer’s ability to obtain financing or the successful sale of their current house before they can finalise the deal. An unconditional offer, by contrast, does not include any special conditions and must be accepted without modification for it to be legally binding. The seller may accept an unconditional offer without any further negotiations; however, there are risks involved in this method.
The buyer may not have the financial means to complete the purchase, or they may decide to withdraw from the agreement after the cooling-off period. Both parties must be fully aware of their rights and obligations before entering into any binding contract.
What is a private treaty?
A private sale, also known as a private treaty sale, is where the seller sets the purchase price for their property. This is often done after working alongside a real estate agent or seller’s agent with expertise in selling property and in-depth market knowledge.
The real estate agent will then start to market the property. Potential buyers can make an offer to purchase the property at the current asking price or negotiate a different price with the seller. The seller can review any offers and then decide whether or not to accept one of them under a private treaty.
When does the settlement period begin?
The settlement period begins on the date specified in the contract, which is usually 30-90 days after the buyer signs the contract.
During this time, the buyer may complete any financial obligations and arrange for inspections of the property to be completed before signing off on the final paperwork. The seller will also begin preparing for the transfer of ownership, including preparing documents such as title deeds and transfer documents.
Once all the steps are complete, the settlement period is finished, and the legal title to the property transfers from the seller to the buyer. The date of completion should be clearly stated in the contract, so it’s important that both parties understand this process before signing any documents.