Method Of Sale
What method of sale is best? Everything that goes to auction sells straight away; doesn’t it? NO – it doesn’t. In Melbourne there are a lot of suburbs that have auction as their main selling method. Auctions help to promote competition and also “fear of loss” amongst prospective purchasers. Auctions are also an “unconditional sale”. But you need to understand that this is a double edged sword! Not only do many agents apply a lot of pressure onto purchasers at an auction, but I have seen a lot of pressure applied to the vendors in the middle of an auction as well.
Handling the agent efficiently and effectively is the most vital part of the sales process. The agent must be continually urged to look at a price that is a real stretch but not totally unachievable. An agent is rarely focused on the last $20,000 he achieves in the sale. He is focused on the commission he will receive for the first $500,000.
When receiving offers whether it be during an auction campaign or in private treaty negotiations, how you first respond can make the difference between getting an extra $25,000 or coming up $5000 short of your minimum price. Putting a buffer between you and the agent can be a very good way to manage the pressure of an exceptionally stressful situation.
The final amount isn’t the only negotiation you have to worry about. How much deposit a prospective vendor is offering or what settlement they want may be more important than the final price. And you need to understand the only thing that matters to the agent is “getting the deal” That is when they get paid! If you haven’t purchased another property you may be happy for a longer settlement, however, the vendor may want something shorter. You need to able to rationally and calmly think through the options. If the vendor specifically wants a short settlement he may be happy to pay a little extra for it. And you may also be happy to take a little money off if the settlements can be matched to save you paying for bridging finance.
You need to have an expert negotiator on your team.