There are several different methods of selling a property which we have outlined below along with a few reasons why each method is typically used. If you’re thinking of selling then each of these methods should be assessed as to which one meets your goals and objectives best.

The methods most commonly used are:

* Private Treaty

* Traditional Auction

* Modern Method of Auction

* Informal Tender

* Formal Tender

Now lets go through each method in a bit more detail:

* Private Treaty

The process called “For Sale by Private Treaty” is the method employed by most estate agents, preparing descriptive details of the property and quoting a definitive asking price. Details are circulated: potential buyers may view the property and either agree to buy at the asking price or submit an offer to purchase. Agreement to buy at this stage (for England and Wales) is subject to formal contracts being prepared between the vendor and the purchaser and those contracts being signed and exchanged between the two parties.

If several interested parties are introduced to the seller those parties will be invited for “best & final offer” thus ensuring the vendor receives the optimum price.

When used:

The vast majority of presentable residential property where the seller is looking to move from one home to another.

Average time to sell from initial marketing to completion is currently around six months at the time of recording so this potential and varied timescale should be considered when choosing Private Treaty.

At present approximately 30% of transactions collapse before exchange of contracts and the average amount a homeowner loses in that process is around £2,900.

* Traditional Auction

The property is advertised for sale by Auction, rather than at a fixed price. Those interested in buying attend a competitive auction, conducted by an Auctioneer, at which the person who bids highest buys the property.

The successful bidder is legally bound to purchase when the Auctioneer’s hammer falls on his bid. He pays a 10% deposit there and then and has to complete the purchase on the stated completion date – normally 4 weeks after the auction date. The buyer has to arrange finance and make any enquiries (including carrying out a survey) before he bids. It is too late afterwards.

When used:

Properties for which there is likely to be strong competition – so that it does not matter if some prospective buyers are not able to bid.

Properties that are most likely to appeal to cash buyers (rather than those with a property to sell or needing to borrow) – for example building plots and properties needing renovation or redevelopment.

Properties with serious defects, where there is a fear that buyers by Private Treaty might keep pulling out because of concerns over the risks they are taking

Those where it is very difficult to predict the likely sale price.

When the seller needs completion within a certain timeframe.

* Modern Method of Auction

New concept more commonly known or referred to as online auction.

The successful buyer is required to pay a Buyers Reservation Fee/Deposit and sign a Reservation Agreement. The property is then reserved to the buyer. The buyer and seller are then required to unconditionally exchange contracts and complete the transaction within 56 days.

This allows buyers time to raise finance so opens the auction to more potential buyers.

No Agency fees and the seller receives the full auction price achieved.

Often an upfront charge for the auction pack paid for by the seller.

When used:

Properties for which there is likely to be strong competition.

Can offer a wider range of buyers with the right marketing due to extended timescale between reservation and exchange of contracts.