Part six of a seven part series, the ‘Seven Costly Sins’ that home owners commit when selling their home.
Costly Sin #6 - Choosing the wrong selling method
Not every home is the same and not every property will benefit from the same selling method. There are many different methods you can use to sell your home including Auction, Tender, Price and Not Price or variations thereof. Choosing the most effective method to market your home is imperative in achieve the best result possible.
Auction
Auction marketing involves a high profile structured campaign which ensures maximum market coverage. This selling method signals to the market that the vendor is serious about selling and that buyers need to view the property with some urgency because it will be sold very soon. The key to a successful auction is the work done by the agent during the programme to get as many buyers as possible into a position to bid.
Other benefits to auctioning are; Prior to auction day buyers must have all their conditions satisfied to be in a position to bid. The open bidding situation on the day gives equal opportunity to all bidders.
The best feature of auction is that the sale is unconditional, on the vendors terms, and the property is sold within a short time frame.
Price
Pricing your home lets buyers know exactly what you want. If what you are asking is within the selling zone this method works well. It is worth noting that buyers will generally start below your sales figure and negotiate up.
No Price
This allows you to give an indication to the market of your expectation without declaring an actual figure.
This method invites buyers to negotiate with you upwards from a base figure. This figure is one that you believe the market will pay.
The key to success with this method of marketing is to establish a fair market value.
It should be realistic enough to attract interest and encourage offers, and be low enough to attached a number of buyers who on becoming emotionally involved with the home, are prepared to negotiate.
No Price allows greater flexibility, which can be attractive to some buyers.
Be aware that some buyers will get frustrated with no price marketing.
Tender
Tender is similar to auction employing the same high profile, no price approach within a definite time frame. There is no open bidding however and is more common in Commercial Real Estate.
Tenders are delivered in sealed envelopes and the vendor can decide to accept, reject, or negotiate with any party depending on the terms and conditions. It is possible to have conditional offers in a tender process.
When selling your home the best selling method will be one that meets your needs in a way that is effective within the current market environment. All selling methods have advantages and disadvantages. Choosing the most appropriate method can be a difficult decision and it pays to get it right the first time.
Sin #1 – Pricing outside the selling zone
Sin #2 – Displaying your home ineffectively
Sin #3 - Over Capitalising
Sin #4 - Ineffectively marketing your home
Sin #5 - Letting emotions cloud your judgement
Sin #6 - Choosing the wrong selling method
Sin #7 - Engaging the wrong marketing agent
This is an extract from “How to avoid the Seven Costly Sins homeowners commit when selling their home” written by Mark Lambie
Mark is a top performing Sales Manager with Ray White in Christchurch and can be contacted via email (mark.lambie@raywhite.com), mobile (0274 400 200) or visit his website
The information contained in this article is of a general nature and should not be taken as advice. It reflects the opinions of the writer only and does not necessarily reflect the opinions of New Zealand Home Loans.
