Methods of sale
For commercial and industrial properties valued at under $10 million, this is one the most popular methods of sale.
The auction process timeframe is usually over a 4 to 5 week period, with interested parties given relevant property information allowing them to undertake due diligence. A prospective purchaser can make an offer prior to the auction which, if the vendor accepts, will result in the auction date being brought forward.
At auction, a reserve price is set by the vendor and the property will be declared “on the market” only after this price has been met. It will then be sold to the highest bidder when the hammer comes down.
When a property is sold, the sale becomes unconditional, and a non-refundable 10% deposit is required to be paid. The date for settlement is generally one month from auction, unless the purchaser asks for a variation to this prior to auction date.
Tender is a popular method of sale particularly for larger, more complex properties. Prospective buyers prepare and submit confidential written offers for a property to the agent for the seller’s consideration. There is no reserve price and the vendor is under no obligation to accept any of the tenders made.
If you wish to submit a tender ask the agent for a copy of the tender documents. Read them carefully, including conditions and any amended clauses. You will be asked to fill in a sale and purchase agreement and submit it before the close of the tender. Following the tender deadline, the agent will provide all tenders to the seller who can weigh up offers and conditions and decide which, if any, they want to accept.
Private Treaty/For Sale By Negotiation
This generally involves the sale of a property with a fixed price in mind. This is decided by the seller in discussion with the agent, taking into account the seller’s views and the agent’s appraisal of the property’s value.
The price will not necessarily be disclosed in marketing material particularly when it is hard to estimate what a property is likely to sell for. Each prospective buyer will be asked to make a signed written offer. The agent will present all offers to the seller who will weigh up which, if any, they want to accept.
There is generally no timeframe around this sales process so there is less pressure on vendors and purchasers.