Selling

Sale Methods & Agreements

Ultimate Selling Guide

One of the biggest decisions you will need to make when selling your property is what sale methods you will use. It is important to weigh up the options in order to determine which one may be best suited to your needs.

Various Sale Options

 

Auction

A public sale of property where the highest bidder is normally the successful buyer
Benefits
This method of sale generates competition for your property.
The auction date creates a sense of urgency that prevents buyers delaying their decision.
You are protected by a reserve price. This means your property won’t sell unless bidding reaches a pre-agreed level.
There is no ceiling price so you have the opportunity to achieve a price above your expectations.

 Private Sale/Treaty

A private sale has no specified closing date and is usually negotiated between a buyer and seller with the assistance of an agent.

Benefits
Some buyers are nervous about bidding in an auction.
You have more time to consider offers made by potential buyers.
It assists buyers to formulate offers that address your desired selling price, which leads to a faster negotiation process.

Expression of Interest

An expression of interest is similar to a private sale / treaty however a formal offer must be submitted for the property by a specific date.

Benefits
It provides you with the benefits of a private sale but with the urgency of an auction.

Tender

A tender is a very formal sales process, which requires potential buyers to submit a proposal in response to the request to the owners advertised tender. Given the complexity of this process, it is usually only reserved for premium properties in the residential sector.

Benefits
Tender offers the intensity of an auction without the potential stress of an auction day.
It enables you to keep the price you may accept for your property discreet and let the market dictate the price buyers are prepared to pay.
As a tender has a closing date it creates a sense of urgency in the buying process.
This method of sale generates competition for your property.

Agreements

Once you have decided to commission an agent’s services, an agreement will need to be signed by both parties. The type of sale and the number of agents involved will impact the type of agreement you will be entering into. A full summary of agreements by state is detailed below.

Victoria 

Exclusive Sales Authority: a vendor engages the agency on an exclusive basis to market and sell the property by private sale.

Exclusive Auction Authority: a vendor appoints the agency on an exclusive basis to market and sell the property by way of public auction.

General Sales Authority: a vendor appoints more than one agency to market and sell the property, on a non-exclusive basis. Commission is paid to the successful agency who secures the sale.

New South Wales

Exclusive Agency Agreement: a vendor engages the agency on an exclusive basis to market and sell the property by private treaty.

Auction Agency Agreement: a vendor appoints the agency on an exclusive basis to market and sell the property by way of public auction.

Open Selling Agency Agreement: a vendor appoints more than one agency to market and sell the property, on a non-exclusive basis. Commission is paid to the successful agency who secures a sale.

South Australia

Sales Agency Agreement: (whereby 95% of agreements are done as Sole Agency Agreements) a vendor engages one real estate agent only. The commission has to be paid, regardless of whether the property is sold or not.Whilst the auction process is different it is generally contained in the terms of the Sales Agency Agreement.

Northern Territory

There are no standard agreements in the Northern Territory. However, the Sales Agency Agreement is most commonly used. Sales Agency Agreement: a vendor engages one real estate agent only. The commission has to be paid, regardless of whether the property is sold or not.

Australian Capital Territory

Exclusive Sales Agreement: a vendor engages the agency on an exclusive basis to market and sell the property by private sale.

General Sales Agreement: a vendor appoints more than one agency to market and sell the property, on a non-exclusive basis. Commission is paid to the successful agency who secures the sale.

Tasmania

Sole agency agreement: a vendor engages one real estate agent only. Commission has to be paid, regardless of whether the property is sold or not. Open listing agreement: a vendor appoints more than one real estate agent. However, the property may be sold privately and without any commission paid to the agent.

Conjunctional agreement: a vendor may appoint more than one real estate agent. Commission is paid to the successful agency who secures the sale.

Auction Authority Agreement: a vendor appoints the agency on an exclusive basis to market and sell the property by way of public auction.

Multiple Listing Agreement (Multi-List): also known as an exclusive agency agreement, in which a vendor appoints one agent, who then agrees to work in combination with other multi-list agents in order to sell the property.

Queensland 

Exclusive or Sole Agency Agreement: a vendor engages the agency on an exclusive basis to market and sell the property.

Open Listing Agreement: a vendor appoints more than one real estate agent. However, the property may be sold privately and without any commission paid to the agent.

Auction Agency Agreement: a vendor appoints the agency on an exclusive basis to market and sell the property by way of public auction.

Western Australia

Exclusive Selling Agency Agreement: a vendor engages the agency on an exclusive basis to market and sell the property.

Authority To Auction and Auction Code of Conduct: a vendor appoints the agency on an exclusive basis to market and sell the property by way of public auction.

Non Exclusive Selling Agency Agreement: a vendor appoints more than one agency to market and sell the property, on a non-exclusive basis. Commission is paid to the successful agency who secures a sale.

Data is provided from the Real Estate Institutes of Australia