One of the factors to consider when selling your property and consulting with your real estate agent is the method of sale. That is, what process will you adopt to sell?
Selling your property at auction means setting a date and location (either at the property or auction rooms/venue) and inviting all your buyers to an open bidding process which will also require you to set a reserve price. The reserve price is the minimum price you will accept for your home and is usually set just prior to auction day. Your property will sell at auction when the reserve price is reached or exceeded. If the reserve is not reached, you can still sell on the day under auction conditions by negotiating with individual bidders after the property is 'passed in'. When the hammer comes down at the auction, your home is sold and there is no contractual cooling-off period.
There are many benefits in selling at auction, including having a set sale date (if you reach the reserve) and buyers competing driving the bidding up but they can also be stressful and incur an additional fee for your auctioneer and room hire if needed. If your property does not sell and you need to start the sale process again, you will be up for more marketing expenses.
Selling by private treaty requires you to advertise your property for sale at a specific price or price range and there is no set sale date. Buyers have a really good idea of the dollar value you want which helps them to negotiate. The process of a private treaty sale can be much slower than an auction depending on your marketing campaign and there's an opportunity to adjust the asking price throughout the term of the campaign.
Exchanged private treaty contracts for sale usually contain a 5 day cooling-off period where a buyer can rescind or cancel the contract if they change their mind and not proceed. If they wish to exercise this right, the buyers will forfeit the 0.25% of the property’s sale price to the seller.
Tenders are like an auction with no set auction day. Instead it is a tender day where buyers are invited to submit private offers (bids) by a specified time on a specified date (it's usually a 3 week period instead of a 4 week auction period) . After the deadline you get to review all the offers with your real estate agent - there is no reserve price and no obligation to accept any tender at this time. Tenders can produce the benefits of an auction and at times exceed that of an auction. This can happen because your buyers don't know the highest bid, will offer their best and a gap of tens of thousands could be the result. If the private offers are too low your agent can negotiate with potential buyers. Sellers who use this method often comment that there is little or no stress.
Talk with your real estate agent to determine which method of sale is best suited to your personal circumstances and property. One Agency Pinkerton Properties recently sold two properties using this tender method. As a result both were sold at the three week period.