by Damian Collins REIWA President https://reiwa.com.au/
If you are seriously interested in a property that is for sale by set date, it’s important as a buyer or investor to understand how this sales method works and how to navigate through the process.
A sale by set date is when buyers are given a deadline (usually around four weeks) to submit offers to the selling agent. Once the specified deadline is closed, all offers will be shown to the vendor, who will then choose whether to accept one of the offers, negotiate further on an offer or put the property back on the market.
This is commonly used to gauge levels of interest in a property that’s hard to appraise, or to secure a higher price on a high quality property in a hot market. This type of selling method can be hard to navigate for a buyer, especially when limited (if any) information is given about the asking price or existing offers made on the property.
So, where do you start? First and foremost you need to find out what the property is worth. In many cases, very limited information is available, making it difficult to determine where to begin an offer, which can lead to mistakes such as overpaying for a property.
The key starting point for any buyer should be to assess the property’s actual value. While researching the local market and comparing similar properties will give you a better idea of the property’s general worth, ultimately you need to decide on a price you are comfortable with.
The next step is to establish a strategy. The more aggressive approach, and one favoured by buyers who don’t want to wait until the end-date period, is to put your best offer forward first with a limited time clause. The idea behind this strategy is to encourage the owner into making a faster decision by creating the pressure of a short time frame.
Alternatively, if you are willing to wait until the end of the set date period and negotiate, you may want to speak to the selling agent to assess existing levels of interest in the property. This will ultimately depend on what the selling agent is willing to disclose, but any information you can uncover will be helpful.
If you think there are no existing offers, you may want to wait until the selling agent prices the property after the closure of the end-date sale before placing an offer. Alternatively, if the property is already generating significant interest, it may be time to put your best offer forward.
If you are unsure about how to approach a sale by set date, consider hiring a REIWA buyer’s agent to navigate the process on your behalf. This can be key in helping you get a better deal on the property and, most importantly, avoiding any mistakes that could cost you further, down the line.