There are many differences between methods of sale between the different states around Australia.
Understanding these differences can be a big advantage, especially if you are an out of town buyer looking to compete with local buyers and property experts.
Here are the methods of sale for residential property in Queensland and how they work.
Our Auction market is not as popular as some of our southern states where a much larger percentage of properties go under the hammer every weekend.
The Brisbane Auction clearance rate usually hovers between 40% – 50% each weekend, so it is important to understand that it is not really the buyers preferred method of sale.
Auctions in Queensland are generally reserved for;
- Properties that are unique and hard to put a price on due to lack of comparable sales
- Higher end properties
- Development sites
- Hot markets
When you go to Auction you do not have the luxury of a building and pest or finance clause, so all of this should be finalised prior to Auction day.
In some cases, offers will be accepted before Auction day but your offer would need to be under Auction conditions and expect to pay a premium to get it prior in most cases.
This still remains the most popular form of sale in Queensland.
Private Treaty involves publicly listing and advertising the property, in most cases with a set price.
There is a great deal more protection in this method of sale for the buyer also.
Along with a cool off period, they are also able to insert building and pest and finance clauses and anything else they may wish to stipulate for the sellers consideration.
It becomes a lot more difficult when there are one or more other offers — Multi Offer Scenario
All negotiations will stop and each buyer will be required to put their best offer forward to be considered by the sellers.
It can be a bit of a guessing game, not do you need to put a final price down, but you also are required to tighten your conditions in many cases.
You may be up against a cash offer or you may not.
You may be up against someone $10,000 higher or $10,000 lower than your offer.
This is where you must be extremely comfortable in what offer you are putting forward as there is no second chance.
A property professional on your side in this case can be invaluable.
This form is still the least popular but is growing in popularity.
It is also known as a silent auction.
The buyers must submit their offers by a certain date and they are then presented to the seller for them choose the best one.
Once again, it can be a bit of a guessing game with price and conditions, so do your homework and be comfortable with what you put forward.
This method of sale is usually reserved for unique properties, like development sites etc.
Agents will usually prefer to push for an Auction as there is more theatre involved and emotion and they feel buyers’ competitive juices flow more at Auction leading to a higher price.
This is a very rare method of sale but can be a great way to purchase a property.
These types of sellers fall into a number of categories;
- Extremely motivated
- Older sellers who are not keen to have people trampling through their home
- A messy break up or death in the family
- An existing lease in place and not wanting to disturb tenants
- Messy tenants that make it difficult to market
As an industry expert, these are more common than you think.
We generally find around a third of our properties off market or even pre-market.
Pre-market allows us access to the property prior to it hitting the open market.
Once again you will need a motivated seller or a strong offer, but these are often some of our best purchasers and success stories.
This is a great method of sale for the buyer as you get to negotiate on your terms, the price, conditions and settlement to suit you and the seller.
It is mostly some property professionals that have access to these properties but it can still be achieved for the average person.
Here is an article I have written previously on that topic.
While there are varying ways to sell a home in Australia, there are a number of differences in local markets.
In Queensland, Private Treaty is the most common and favoured by sellers with Auction and Tender starting to grow in popularity.
One big difference to other markets I would suggest would be the Multi Offer scenario, it catches a lot of people out from my experience.
One of our preferred methods is accessing properties off market or pre-market.
This can be a real benefit for our clients as it allows them to find a great property that can be negotiated on our preferred terms.
At the end of the day no matter which method of sale you face, it pays to be prepared and ready for any situation that may arise.