Auction marketing involves a high profile structured campaign which ensures maximum market coverage in a short time frame.
This marketing 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 could be sold very soon.
This sense of urgency that auction creates works very much in the vendor’s favour.
Prior to auction day buyers must have all their conditions satisfied to be in a position to bid.
The key to success on auction day is the work done by the salesperson during the programme to get as many buyers as possible into a position to bid. The opening bidding situation on the day gives confidence to all bidders in the auction process.
The best feature of auction is that the sale is unconditional, on the vendor’s terms, and the property is sold within a short time frame.
Tender is very similar to auction employing the same high profile, no price approach within a definite time frame
There is no open bidding however.
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 sometimes possible to have conditional offers in a tender process.
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 attract a number of buyers who on becoming emotionally involved with the home, are prepared to negotiate.
If it is too high, you could overshoot the market and you may have been better to put a price on it.
No price allows greater flexibility, which can be attractive to some buyers.
The property is marketed at a price that is acceptable to the seller.
If priced at fair market value good interest will be shown in the property and it may make it easier for potential buyers to determine whether the property is within their reach. It is usual for the buyers to begin negotiating below the listed price.
As buyers will be comparing the property to others on the market the seller must be particularly careful not to over-price or under-price the property. You sales consultant may be a useful source of information about properties on the market with similar features, and those that have recently sold. Some buyers may eliminate the property from consideration based solely on price.
Buyers may make an offer based on conditions having to be satisfied.