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In this week’s episode, Dave, Cate and Pete take you through:
A question from our listener
Thank you for such an informative, but entertaining podcast. I’ve just listened to the episode on “off markets”.
I am just wondering if you can offer some insights into:
- how to navigate when a property is “on market” but is listed as EOI (expression of interest), rather than a price range?
- Why might a vendor do this?
- Do you put your best price forward and declare all your cards, or is there still an opportunity to negotiate?
- Is it a case of Pete’s rotten apples potentially? Thanks team
What are the typical methods of sale around our nation?
- Private sale with; Range, Set price, No price
- Sale by tender/Expressions of interest/set sale
What factors make these types of sale methods vary?
Type of property, calibre of proeprty, seasonal, types of buyers, market sentiment. If in seller’s market, you’d treat differently than in a buyer’s market. You wouldn’t put an EOI campaign on something that’s a dime a dozen and affordable. You’d put it on a unique property that has a chance of getting a stellar offer that surprises everyone. Generally speaking a vendor with an EOI campaign is looking for a happy surprise.
What happens if the high offer is really low
- Campaigns could change, auction campaigns change, goes to private sale. Expressions of interest come with a deadline – about a month. Underwhelming offers, they may convert to private sale or auction. Is something wrong with it? Do you show all of your cards and go for baby step? Best and highest, one offer – then the agent calls you and asks if its really your best. This happens greater than 50% of the time. Sometimes they’re fishing to look like a hero, and sometimes they are actually being honest, sometimes trying to create competition with a boardroom auction.
- Social proof might be what’s required to get a higher offer.
- Every case is different, how badly do you want the property, how much competition is there?
- If I don’t know the agent very well and they say best and highest, will give the best. If they say, give us something good and we’ll call you back – that means there will be another opportunity. If they say we’ll get the top 3 and speak to everyone.
- I won’t tell you the other offers, but if there is a higher one, we’ll give you an opportunity to increase.
Why wouldn’t you action a property?
Key reason to go to auction is if there are multiple buyers who are keen on the property. Competition through bidding that will push the price up through the process. If you’re worried that there will only be one or two or maybe none, then there is greater risk in taking it to auction.
As a vendor, what sort of guidance and rationale should you be looking for with your agent when you are considering the various methods of selling?
- When selecting a real estate agent, what is their preferred method of sale – auction or private treaty? What do you think is the best method of sale, and then research the real estate agents.
- If the price guide changes for expression of interest or auction – what does it mean if it is reduced or increased. Now we’re seeing reductions, last year we saw step quoting.
- Sometimes because the agent is honestly thinking that’s where it sits.
- Sometimes there is a property that attracts more interest.
- If it shifts down, it means they want to get more people through the door.