With property prices tipped to trend down for some time and for those vendors keen to sell, there’s a new term in town – FONGO – “fear of not getting out” – and it’s real.
Property prices are down, national auction clearance rates are barely above 50% and the uncertainty whether a sale will happen or not is playing on vendors’ minds.
So, how can vendors sell in the current market while managing their costs and risks?
The auction sales process has been the main method by which property is sold in Australia but in the current climate there are now other methods that may deliver positive results at a lower cost to the vendor.
Both auction and publicly advertised private treaty methods involve promoting a property on property platforms such as domain.com.au or realestate.com.au and/or via print media, with the cost to market a property running into thousands of dollars. Further, the auctioneer alone can cost up to $1000. The question is why would vendors risk spending and losing this money if they don’t need to?
What many vendors don’t know is there is another way to sell property – a direct sales method that doesn’t require expensive advertising nor does it expose the property publicly in a tough market (therefore no public footprint online) and is simply a safer option in current market conditions - and that is the ‘off-market’ approach.
Selling ‘off-market’ is not new - many vendors don’t like a ‘pressured’ auction process or simply want to save on marketing costs favour the ‘off-market’ approach.
Using this sales method, there is little ‘financial’ risk for the vendor. The likelihood of achieving a higher price at auction is seriously in doubt, with auction clearance rates well down and buyers holding back.
So how is ‘off-market’ property marketed to buyers? Traditionally, real estate agents have buyer databases which they draw on to promote off-market properties or speak with their pool of buyers agents but until now there has not been a public platform for all buyers, vendors and agents to use.
Property Whispers, Australia’s first ‘off-market’ sales platform was launched to provide a place for registered buyers and off-market properties for sale to be instantly matched. This provides an easy way for buyers to access these properties instead of having the time-consuming task of contacting all the agents in their local area to be put onto local databases and hope someone calls them.
The ‘off-market’ process can be identified as ‘Phase 1’ of the selling process. During this time, buyers are introduced to the property and in many cases a sale occurs (approximately 10%-20% of property is sold off-market each year in Australia).
If the property is not sold during this process valuable feedback on the property and its price is gathered for the next phase. If the right buyer is not available, then a wider net can be cast and ‘Phase 2’ kicks into gear on-market, with the vendor now better informed and perhaps happier to foot the hefty cost of an advertised on-market campaign.
In this cooling market vendors can now choose a more savvy, sensible approach to their property sale instead of charging head-on into an uncertain auction market.