Part of the discussion your estate agent should be having with you when appraising your property for sale will be the best method of sale. Private treaty is by far the most common and involves the estate agent negotiating a price between the seller and buyer until an acceptable agreement is reached subject to contract. The asking price is often a set figure and there will be an expectation this is the maximum price. Alternatives include offers in excess of a figure, offers in the region of a figure or a guide price. All are valid and can be applied in a number of circumstances, but I would suggest have maximum benefit to the seller when the stated figure is realistic with a view to obtaining as many interested parties as possible to maximise the sale price. These alternatives are marketing tools, utilised when it is difficult to provide a precise value or when strong competition from a number of buyers is anticipated. For example, the property might be unusual in design, in a prime location, require modernisation and/or retain original features.
Selling by public auction is a popular alternative. This method, unlike the private treaty sale, has the advantage of working towards a set date and time when all the bidding will take place. Buyers will need to view the property and make all their enquiries and arrangements prior to the auction; survey, finance and legal enquiries so they are in a position to exchange contracts. Once the hammer goes down the buyer is legally obliged to complete the sale. This can be an ideal way of selling if completing within a prescribed time is important, there is an expectation of competition from a number of buyers, it is difficult to assess the value or perhaps the property is being sold by executors, who have a duty to demonstrate they have acted in the best interest of the estate and beneficiaries.
Selling by tender is less common and can be formal or informal. With an informal tender the bid is usually made by a set date and time, is not formally binding, but there is an agreed time within which exchange of contracts must take place. A formal tender is more akin to an auction but has flexibility. The seller can choose who they wish to sell to, and it may not be the highest offer. However, if the offer is accepted the buyer is deemed to have exchanged contracts and a non-refundable deposit (normally 10%) is paid.
Watsons has recently started an auction service by utilising a modern online method. This has the advantage of buyers being able to bid from the comfort of their own home 24 hours a day, 365 days of the year. Having viewed the property being sold by auction, to place a bid interested parties must register online, and once registered are granted access to a Buyers Information Pack, which should be reviewed by a solicitor. You can bid online, in our branch office or over the phone and the system allows you to see the current bid, the number of bidders, plus a live countdown to the end of the auction. If you are successful you will be required to pay a reservation fee/deposit and also sign a reservation agreement. The property is then reserved exclusively to the buyer.
For further information contact Nick Eley, Partner at Watsons on 01603 751564 or n.eley@watsons-property.co.uk
