With the market being at such a frenetic pace it’s a good idea to review the pros and cons of each selling method.
SOLE AGENCY (EXLUSIVE AGENCY) – Vendors list their property with only one real estate agency. The advantage is maximum resources are available to market the property and ensure the Vendor (seller) receives the absolute best price. The disadvantage is only one agency can sell this property which could reduce the amount of people that may look at the property.
GENERAL LISTING (MULTI AGENCY) – a client lists their property with several agencies. The Advantage is this may create competition between agencies. The disadvantage is resources available to market the property are less meaning that less people looking at the property. Multiple signs outside the house can also make the property look like “hard to sell” and purchasers may think there is something wrong with the house.
PRIVATE SALE – a client does not sell their property with a real estate agency. The advantage is the Vendor does not pay real estate commission. The disadvantage is that the Vendor has to pay for the marketing and if not sold that money is lost. The Vendor does not have access to as many buyers meaning that while they may sell their house it may not sell at the highest price the market would offer. Purchasers would need to satisfy more requirements for any lender required to finance the purchase and Purchasers are not protected by the same legislation that governs licensed MREINZ agencies.
AUCTION – property is sold with potential purchasers present and publicly putting in their offer until the offer exceeds the reserve set by the Vendors. All offers are unconditional. The advantage is that this can push the sale price up. The disadvantage is that purchasers may be put off by the public nature and the fact that the offer has to be unconditional. The Vendor pays to market the auction and if the house is not sold they lose that money. Agents generally find that this is not a successful way to sell properties in this area.
TENDER – offers are confidentially submitted within a defined time frame. The offers can be conditional. Generally a deposit (eg 10% of the purchase price) is required to be paid immediately if the offer is accepted. The advantage is that Purchasers can put in conditional offers. Purchasers generally offer their best price which means Vendor should get the maximum price the market is offering. The disadvantage is purchasers have to come up with the 10% deposit. Purchasers may not get an idea of what the other offers are and overshoot the mark ie pay far more than their rivals.
SET SALE DATE – similar to a tender offers are invited to be presented by a certain date. No deposit is required immediately if the offer is accepted. The advantage is that it takes the urgency away from purchasers in making an offer. It allows the Vendor the opportunity for multiple offers and hopefully getting their best price. The disadvantage could be that a “hot buyer” may cool by the sale date.
