oc | Monday 24th February

New Skills Required for Expressions of Interest and Range Private Sales – The BLIND AUCTION

raw_Blind Auctions Can Work For youThe New Game in Town – Best Offer in buy 6.00 pm on Deadline Day. No Rules – Written or Otherwise No Guidelines from REIV or Law What Price – When is enough actually enough – when is it too much? The Buyers Dilemma – Are you trying to buy a Price or buy a Property? The Sellers Dilemma – Are they getting a buyers best offer! Fear of loss in many cases is overtaken in a conservative buyer’s mind by fear of paying too much or fear of process or fear of selling agents. Not all bad – play your cards right and you may also get some real here!

It was only a matter of time, although it took longer than expected for a number of high quality selling agencies to move away from blanket auctioning to other alternative methods of sale such as Range and Deadline Private Sale or Expressions of Interest.

These are not new methods – buying $5 and $10 million homes with some regularity we have experienced these methods of sales for years. It’s just now they are becoming more widespread at lower levels.

Blanket auctioning was/is destroying agent reputations, seller confidences and in a bizarre twist buyer confidences as well. Something had to give and it seems like it is the auction system itself which is no longer seen as the inner city cure for selling all homes.

Auctioning is not dead and it will return; because in a rising market, overall nothing works better than auctions for sellers.

However we are not in a rising market and especially so in the million dollar plus market!

How do Expressions of Interest and Range Private Sales work?

THEY ARE IN FACT BLIND AUCTIONS.

Step 1 – Selling Agent puts a sign Home for Sale.

Step 2 – Buyers know a very rough suggested price.
Step 3 – Call for submissions by a date.
Step 4 – Open for Inspections or Private Appointments.
Step 5 – Buyer submissions come in – no standard way.
Step 6 – No Written Rules from Seller on how it works.
Step 7 – How much do you write in on you submission – do you in fact write a number?
Step 8 – Selling Agents interest and discuss with seller.
Step 9 – Who knows what’s next – well it depends. How long does it take – well it depends. Do you get a call – well it depends.
Step 10 – What is the competition – the vendor or other buyers? Who knows?
Step 11 – Some form of smokes and mirrors takes place and a “winner” is found
Step 12 – Property is sold – maybe.

It should be obvious but there are a number of “holes” here for buyers to fall into.
Step 5,6 and 7 – You really need to know how to do this? Too low or too little interest shown and you are left out of the process. Too high or too much interest shown and you will buy the property but with many auction reserves dropping by $500,000 in a week you can easily pay too much.

Step 9,10 and 11. – With auctions you could see the whites of their eyes or lack of them. You were told it’s on the market. You knew a reserve at some point. With Expressions of Interest and Range Private Sales you do not know that so you need techniques and a plan to manage this particular part of the process.

As much as some buyers struggle with auctions when they are working properly there are transparent. Nothing can be less transparent than selling agents speaking to you over the phone claiming this and that. No complaints from us – it is their job and they are working for the vendor not you the buyer. If you have complaints they will fall on deaf ears, so it’s best to get yourselves prepared to manage this ever increasing way to do business on Melbourne’s more expensive homes.

As we said in the executive summary, Expressions of Interest are not all bad; because it’s a process that even fewer buyers have confidence in than auctions. If you know how to play the game, then you can buy homes against other buyers who in fact would have beaten you at auction, because they have more money but less “smarts”.

Buy Well

Mal

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