Methods of sale - which is right for you?
For those looking to sell, doing so by auction has become a tried and tested way to get the best price and sell in record time, which is why we’ve been using this method to sell homes for years, perfecting it to an art to ensure our customers always go away happy.
An auction means you can sell quickly, heighten interest in their property and/or add security to the process that the open market may not be able to offer.
Of course, there are also more traditional methods that can also work wonders at selling your home, as long as it goes hand in hand with an extensive and well thought out marketing strategy.
When most people think about selling a home, they may not know about the many options available and could end up with the wrong method for them, when there are other methods which could suit their sale better.
So which method is right for you? Let’s find out:
Traditional:
Private Treaty
Private treaty involves selling between two individuals who negotiate with one another, and the Estate Agent is often involved to ensure a deal is agreed, which is one of the main reasons selecting the right agent is key. Once an agreement on price and other terms is reached, the agency contacts the legal advisers for the seller and the buyer to conclude the legal process.
A mortgage application for the buyer may also be made should the purchaser require this finance. A buyer may also instruct an inspection of the property (in terms of a Homebuyers or Full Structural survey) or may rely solely on the mortgage inspection. An inspection may occur before or after price negotiations and may, therefore, affect those negotiations.
The many stages between taking instruction and completing the sale often take a few months. There are no set deadlines for the stages and they may be extended if problems arise. Solicitors will collate information from searches and enquiries with replies to any queries being supplied by the seller.
Neither the buyer or the seller are certain of the sale until contracts are exchanged and re-negotiation can occur at any time up to exchange of contracts. In a private treaty sale, the offer and acceptance is only legally binding once formal contracts have been agreed, signed and exchanged bringing about both flexibility and uncertainty.
Invitation to Tender
Tender requires a buyer to place one bid usually in writing. This process can be very effective in ensuring that the best price is achieved based on current market conditions.
Applicants are invited to viewing events at the property and instructed to submit their offers by a date agreed on by the seller and agent. At this point the offers are reviewed and the seller (with our advice) can decide on how they wish to proceed. A formal tender means the successful bidder, which may not necessarily be the highest bidder, is deemed to have exchanged contracts at the point the bid is accepted and may require a deposit. With an informal tender, the bid is not legally binding and there is a period of time to exchange contracts. The sales process with informal tender follows the same pattern as the Private Treaty process.
Auction sales:
Traditional Auctions
Traditional auctions result in a commitment between the buyer and seller. When the hammer falls, there is a legally binding contract in place. A deposit is paid and completion usually takes place within 28 days. The traditional method is usually only accessible to cash buyers who are able to pay outright for the property.
Modern method of auction
This more accessible route creates a transparent platform for buyers and sellers combining the best aspects of traditional auction and private treaty sales. There are more realistic yet fixed timescales, opening up the market place for buyers and sellers looking to arrange mortgages as their method of payment.
The exchange of contracts has 28 days to take place from the solicitor’s receipt of draft contracts, whereas with traditional auctions, the exchange of contracts will usually take place as soon as the buyer has won the bid.
The Modern Method of Auction opens the auction market (once reserved for the professional investor or cash-ready buyer) up to residential buyers, creating a larger market place and more interest and activity than traditional auction. It is the preferred route for buying and selling via auction and has changed the perception of auction in the last decade.
The auctions can take place in person or online, meaning anyone in the world can take part.
If you’re looking to sell your home, and you’re not sure what the best way for you is, get in contact today, and we can talk you through how it works.