Auction vs Private Treaty
Even the better agents face the fear of having a Private Treaty seller accept what seems like a good (or better) offer very soon after listing or home open.
This would normally be great – but complications arise when after the O & A becomes unconditional a latecomer wants to make a better offer or a higher price!
The agent has to stonewall the newcomer as it’s not appropriate to disclose the accepted offer’s price or Ts & Cs.
The better offer is a combination of annoying, frustrating and embarrassing for the agent who is obliged to tell the seller that if the earlier acceptance had been postponed a few days, more $$ would have been available.
The seller is, to say the least, more than peeved.
The latecomers are frustrated, particularly if their offer is above the asking price – also annoyed that it was not possible to discover what they had to beat.
There’s a tried and tested solution to minimise these situations and that’s to market the property’s features and sell it by auction.
This method provides sellers and buyers with a known time on the market at the end of which the better agents will have identified qualified buyers.
The potential buyers at the auction appreciate the transparency of being able to know what $$ they have to beat.
The seller also appreciates knowing that if all goes well all qualified buyers are to be competing against each other in terms of the particular value they placed on the home’s features.
This competition helps draw out the really best price from the top bidder. Underbidders that missed out know they had an equal chance to buy the home subject to their financial ceiling.
A well managed marketing campaign by the better agent produces several potential buyers that are active up to their own limit.
The overall process of marketing the property features usually takes a comparable or lesser time on the market than a private treaty marketing a price method.
Some agents boast that they have “sold” a property in some 3 days noncompetively “off market”. However, can that agent /seller be sure that the buyer would not have paid more?
Can the agent be sure that by not going to the wider buyer pool an even better price and Ts & Cs combination could have been achieved?
Even when going to the wider private treaty buyer pool, the Ts & Cs are set by the buyer which the seller is often obliged to accept. Typically auctions are “cash unconditional” which gives the seller certainty and the better prepared buyers are in a stronger position.
A closing thought. Can agents – the better ones – ignore offering the auction option at the listing appointment, to create competitive bidding?