How to navigate a sale by set date
Recent years have seen in a rise in the popularity of alternative selling methods in Australia, with many vendors using methods such as property auctions and sale by set date in an attempt to secure a better deal on their property in hotter markets. Whilst these techniques can have significant benefits for sellers looking to gauge what buyers are willing to pay for a given property, they also present a number of challenges to investors, with many opting to stay away from these sales due to the uncertainty that accompanies them. But what if you have your sights set on a property being sold as sale by set date?
What is a sale by set date?
Also known as end-date sales, 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 or put the property back on the market. In this sense, end-date sales are essentially a private auction, whereby buyers are given a specified timeframe to make an offer on the property but without the ability to see their competition.
This is a common method used by sellers to gauge levels of interest in a property that’s hard to appraise, or to secure a better deal on a high-quality property in a hot market. However, this type of selling method can be hard to navigate as a buyer, especially when limited (if any) information is given about the asking price or existing offers made on the property. So, how do you get started on negotiating a sale by set date?
How to negotiate a sale by set date
Step One: Find out the property’s worth
In many cases, very limited information will be given in regard to the asking price of end-date sales, making it difficult for investors to know where to begin with their offer. This can lead to mistakes such as overpaying for a property, especially for buyers with an emotional motivation for purchasing the asset.
The key starting point for any investor entering this type of sale 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, the best way to assess this is to get the property professionally appraised. This will help you set the maximum amount you are willing to pay for the property, giving you more confidence and clarity when it comes to placing an offer.
Step Two: Set your strategy
As with any property investment, it’s important to have a strategy in place when it comes to end-date sales, especially given the uncertain nature of this selling method. As an investor, there are a number of ways you can approach the negotiation process.
- The more aggressive approach, and one favoured by investors 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 force the owner into making a faster decision by creating the pressure of a short time-frame.
- Alternatively, if you are willing to 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 about existing offers or the vendor’s motivation will help inform your next decision. If you think there are no existing offers after speaking to the agent, 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.
Enlist the help of an expert
Whilst they can open up wider opportunities for investors, properties being sold by set date can be a stressful and risky process for buyers who are unfamiliar with this selling strategy. If you are unsure about how to approach a sale by set date, you may want to consider enlisting the help of an experienced property 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.
If you are looking to purchase an investment property in Perth and would like to speak to our property buyer’s agent about your investment needs, our team would be happy to discuss your situation in an obligation-free consultation.