An online auction is a method of selling to the person who bids the highest, the person who is prepared to pay the most! It is an open process whereby keen buyers bid against each other. Once the reserve price is reached, the highest bidder becomes the successful buyer.
- Sense of urgency: With an online auction you have a deadline date for when the property will be sold, so you have a finite selling period. This means those who are keen to bid on the property have to get themselves sorted if they want to bid.
- Buyer competition: In an online auction situation you create real time competition - which can lead to a premium price.
- Certainty: There is real certainty when selling by online auction as potential buyers must bid on an unconditional basis. They need to have everything sorted, there is no scope for complicated conditions.
- Control: What vendors love about online auctions is the ability to control the reserve price and select a possession date that works for them.
- No price limitations: When you market a property by online auction you don’t list a price so you are not setting an expectation with the market and in turn you can attract a wider range of buyers.
Online Auction Rules
- You must refresh your screen to see active and current bids
- It is suggested that you hold your online auction at least 5 weeks after signing a listing agreement. This will allow adequate marketing of your property. If you need to bring your online auction forward, please contact Proppy and they can do this for you
- Open homes should be scheduled to start at least 7 days after your listing has been published to allow for marketing of your home
- Auction is set to start 24 hours before the chosen finish time. For example, if an online auction is set for 8pm it will finish at 8pm 24 hours later
- Proppy online auctions will not allow seller (vendor) bids. However, the seller sets the starting (opening) bid for their property
- Bids – can be set at any number you wish. If you use the auto-bid functionality, bids will increase in increments of $500 until you reach your auto-bid limit
- If you win an online auction you will be notified by email and are asked to sign the sale and purchase agreement online. Once the buyer has completed the sale and purchase agreement the seller will be asked to sign the sale and purchase online and the transaction is completed. Final copies of the documents are emailed to all parties
- Please note that if you are bidding on an online auction you have signed the Proppy buyer’s agreement and are legally bound by the terms
If an online auction does not hit the reserve:
- Proppy will email the seller and let them know that their reserve hasn't been met and will invite them to negotiate online with the highest bidder
- Proppy will email the highest bidder and invite him/her to the price negotiation screen online
- Online negotiation will be open for 2 hours only. It is recommended that sellers are online while the online auction is taking place
- If either party (seller or buyer) cannot start within the 2-hour window after the online auction has finished, the online negotiation is void and the listing goes to a standard offline negotiation state through Proppy
- When the buyer makes an offer, the sellers window will automatically update with the price and the seller will be able to accept or withdraw the offer by clicking on the appropriate button. If the seller clicks the accept button, then the deal is made. The system will then create the digital sale and purchase agreement for both the buyer and seller to sign online
- If the seller is not happy with the offer, they can keep making a counter offer by typing in an alternative sale price
- If either the buyer or seller clicks the withdraw button, the online negotiation finishes. The online communication is then stopped and neither party can make any more offers. The listing now enters normal negotiation state, where all buyers can make offers on the property through Proppy. The seller now has a chance to change their asking price
- If there are no bids, or the 2 hour, window doesn’t result in an agreement the online auction is terminated. The online auction turns directly into an offline negotiation state. The seller will be contacted by Proppy on next steps on how they would like to proceed - you are in control
A negotiation selling method is when properties are advertised with a fixed price, a price band or with a price and the words ‘by negotiation’. Buyers are invited to make an offer on the property based on the prices advertised. From there the buyer and seller negotiate on an agreeable price.
Buyers have the luxury of time to do their due diligence
Buyers can add conditions to the sale and purchase agreement. Sellers can agree to those terms, change them or choose not to
The vendor has time to get contracts reviewed and to draft conditions
The vendor can choose to accept or reject an offer, giving them complete control over the process
Buy Me Now
This is a unique proposition by Proppy. The owner sets the price, which is fixed and there is no room to negotiate. The terms and conditions of the sale are similarly fixed and non-negotiable. Like an online auction, a 'Buy it now' offer is unconditional and legally binding. This method works best for investors and people who want to sell in a hurry and for buyers who don't want to negotiate, think the property is a great price and are happy with the terms.
- A seller can market and hopefully generate the price they are asking for immediately
- This method is particularly good for people wanting a quick sale with no mucking around waiting for Tenders to come in, negotiating with multiple parties or setting reserves at online auctions
- In this busy world we live in, people are busy and they just want to set and forget their price
- It is a method of sale that may attract savvy owners that know exactly how much they think their property is worth/ families trying to sell after a death or health issue in the family /marriage breakups/ or vendors in financial hardship that want a sale quickly may like this method.
- From our Proppy research of buyers, buyers do like to see a price. A property with a price may attract buyers that possibly could be put off by an Auction or Tender situation.
- Developers also enjoy this method as they may have many properties they want to sell at one time with a distinctive price.
- Some sellers find other methods cumbersome and stressful. This method can take a little stress out of the situation.
- The method delivers only unconditional offers and signing is digitally conducted.
This is the secretive selling method whereby a vendor asks for written offers to be presented by a certain date. Any prospective buyers need to submit their “best” written offer to a digital lock box for the owner to then review and consider. It is a very confidential process and there is no reserve price. When selling by tender, the prospective buyer needs to complete, sign and submit their sale and purchase agreement when they present their written offer. Because you are signing a legal document it is a good idea to get your lawyer to check it before you submit your offer.
- Sense of urgency: Because you have a deadline date of sale with a tender situation there is a finite selling period which creates a sense of urgency for anyone interested in making an offer.
- Buyer competition: A tender is about putting your best price forward, as there is no room for negotiation. As a result, it creates the conditions for customer competition - which can lead to a premium price.
- Confidentiality: The result of a tender is private and confidential. Proppy uses state of the art technology which includes the use of a digital lock box. No one has access to the offers until the deadline. This allows for better security and anonymity.
- Time to consider: As a vendor you have a five working day irrevocable period in which to decide which offer to accept. This can be important if you need to chat amongst others parties to make your decision.
- Flexibility: A tender allows the vendor to be more flexible with the terms and conditions of the sale e.g. You choose the possession date.
- No price limitations: When you market a property by Tender you don’t list a price so you are not setting an expectation with the market and in turn you can attract a wider range of buyers.
Are there properties that particularly suit sale by tender?
While any property can be sold by tender, it is particularly suitable for:
- Properties where a number of parties must be consulted, for example, properties owned by a family trust or deceased estate
- Properties where potential customers would expect to have to do due diligence before submitting an offer, for example, properties with strong development potential.