Private treaty, set date sale, express sale, 28 day sale, auction – so many choices, but which one is best?

When it comes to selling I’m a big supporter of no-price marketing strategies – when a buyer sees the advertised price of a property they start thinking about how much lower their offer will be.  No price marketing strategies prevent this and have a range of other benefits.

They prevent emotionally-involved sellers choosing an unrealistically high price or over-pricing by inexperienced agents.  They are also useful in rapidly changing market conditions.

They attract a wider range of buyers, rather than just those looking for properties of a particular price, bringing greater competition for the property and leading to the best price the market will pay.

Bringing in more buyers also provides a lot of feedback about where the market sees value, helping the seller make an informed decision when receiving offers.  It also gives the agent the chance to focus on non-price attributes with buyers and lets the buyers judge the property on merit rather than its price.

There are several no price marketing strategies that are popular at the moment, and while many claim to be like auction, they are really a form of tender – where a date is given for buyers to make their offers.  This is a step up from the open-ended nature of private treaty – having a set date encourages buyers to make a decision and potentially create a competitive environment.  Even if there is only one buyer, the perception that on that date there will be others, helps encourage the buyer to make their best offer.

These no price marketing strategies with fixed or set dates also have multiple selling environments.  While an end date is given, they are advertised as ‘unless sold prior’, meaning the seller can accept an offer at any time at their discretion.  If no buyers buy before or on the date then the seller can put a price on the property and perhaps give buyers a third opportunity to make offers after the set date.

These strategies have tremendous benefits and advantages over price-based marketing, but to use a flight analogy, you are really only moving from economy to premium economy.  Why not take the extra step up to business class and sell by auction?  It has all the benefits of set date sales and more.

Auction is the only no price method of sale that has an exhibition day where buyers can come along, experience the atmosphere and see who they are competing with.  This competitive environment is what leads to the best price the market is willing to pay.  It is also a day where the property is showcased and usually attracts several new buyers to the property.  I’ve called many auctions where the successful bidder has seen the property for the first time on auction day.

You also have the benefit of having the auctioneer, a highly skilled, third party negotiator, there to work on your behalf.  Auctioneers are usually elite real estate agents that are at the top of their field, or have had very successful sales careers.  Whether it’s working with bidders during the auction, or helping negotiate with buyers if the property is passed in, having a strong negotiator acting for you can be extremely powerful.

In addition the auctioneer can use vendor bidder during the auction to indicate to the buyer where they need to be to secure the property.  Essentially they are negotiating under auction conditions to get a result.  You also have the chance to decrease or increase the reserve based on the action at the auction.

One of the greatest benefits of auctions is they give control to the seller.  The seller can determine the settlement date, and all conditions, such as inspections, are met prior to auction.  You have a cash unconditional environment before the auction and on the day.  Sellers can accept conditional offers, such as subject to finance, if they want, however they can add their own conditions, such as they can continue marketing the property until finance is approved, which gives them the chance to receive and accept a cash unconditional offer.

If the property is passed in you have another opportunity to receive offers from conditional buyers.  You can also move into a short tender period to give the seller a further, extended no price marketing strategy.

In my opinion, a no price marketing strategy is much better than private treaty, and when it comes to no price strategies, auction is the obvious choice.

Most of us would prefer to fly business class if we could, but the cost is too high.  When it comes to selling you can experience business class, and it doesn’t come with a massive price tag.