House sale options
Will I sell my house via private treaty?
What other ways can I sell my home?
What are the advantages and disadvantages of selling by private treaty, tender and auction?
The largest amount of residential properties in Ireland are sold by private treaty. It’s not always perfect by the system has been working well for years and it remains the most popular. There are 2 other methods to sell your home which are public auction or tender. From my perspective, the easiest way to give you the best advice is to look at each option separately and identify the each of the advantages and disadvantages.
The most common method of house and apartment sales throughout Ireland used by both private vendors and banks/receivers. The biggest advantage for a vendor is maintaining a much stronger control of the bidding process which gives you time to reflect on the bids and time to decide if you want to accept an offer or not. It is also a much more private process. Finally, the typical costs of advertising are much lower as the property may not require such extensive focused marketing as may be required in an auction sales campaign, as Keane Thompson would look after the advertising via our own website www.keanethompson.ie and numerous property, media and social channels.
The one disadvantage is that sales can take a little longer. Buyers, as people naturally do, can change their minds about the purchase at any stage prior to the signing of contracts. Purchasers will always undertake due diligence on the property in the form of a survey by a surveyor for structural integrity etc. or the time it takes to have the title reviewed, only after an offer has been accepted. This can result in time delays and aborted sales.
When this happens and the property is brought back to the market, frequently the momentum in the marketing can be lost. Private treaty is a more cautious method of selling a property as opposed to the two main alternatives.
This way of selling a house is becoming increasingly common now that markets are starting to recover. Back at the height of the market, a major number of sales were carried out by public auction, especially in the Dublin market.
As estate agents, we will only recommend a sale by public auction if (a) we feel there are likely to be exceptionally strong levels of interest, or (b) if you want complete transparency in the bidding process.
Of course there are some instances, due to the vendor being a public body where transparency will be paramount, a sale by public auction may be the only option.
From our perspective, the main advantage with public auction is speed of the house sale, and assuming a reserve price is achieved, its creates a far higher degree of certainty that the sale will go ahead as the purchaser pays a 10 per cent deposit and signs the contracts immediately following the auction. For this to happen, it is up to the buyer to have undertaken all due diligence prior to the auction. Usually, you would expect there will be a closing date within four weeks thereafter. The main disadvantage is that it is a very public process where the bids and selling prices are in the public domain.
Ultimately all prices will be published on the property price register, but a lot of people would be very reluctant to have their property auctioned due to the sale amount being public knowledge.
Choosing this format for a house sale can also lead to higher upfront costs as the property will have to be intensively advertised. The usual period for this is typically over a 3-4 week campaign, and the vendor’s solicitor will have to assemble the title and prepare a sales contract. The main risk is that if the reserve price (whether disclosed or not) is not achieved, the property is automatically withdrawn.
When this occurs, it can be deflating and the sale may lose momentum, which could at best delay a sale and at worst could result in a lower price than might otherwise have been reasonably expected by, such as a private treaty. However, at Keane Thompson we do our utmost to drive sales and marketing for each of our clients to build and keep that momentum going through to the house sale that meets your needs.
This is the least common method for a house sale as it is more common with commercial property and particularly development land. There is basically two types of tender: a formal sale where a party bidding must sign and return a contract with a 10 percent deposit; or an informal tender, often referred to as “best and final bid”.
‘Best and Final Bid’ is more common and may follow an initial sale by private treaty that has resulted in multiple bidders, in the interest of concluding bidding, the agent may seek best bids by a certain date.
Each property is unique, and there is no one-size-fits-all approach to selling your property. When it comes to a house sale, whether you are someone who has to sell within say two months, Keane Thompson will advise you differently to someone who has six months to sell their property.