Planning to buy a Gold Coast property? It’s important to understand the most common methods of sale used in Queensland by sellers and real estate sales agents so you’re in the best position to negotiate and purchase when you find the right property.
These methods are unique to buying property in Queensland.
In my work as a Gold Coast Buyer’s Agent, the most common methods of sale I see for on-market residential properties on the Gold Coast are private treaty, private treaty multi-offers, and auctions. Let’s unpack what’s involved for you as the buyer with each of these sales methods.
Private Treaty
A private treaty sale is a property that is marketed either:
- with a price, or
- with a price guide or price range such as ‘offers over’ or ‘by negotiation’.
The Real Estate agent and seller can disclose price guides although this is at their discretion during a private treaty campaign.
Private Treaty – Multi-Offer Situation
With a private treaty sale, if the seller receives two contracts of sale (written offers) at the same time (before the first offer is accepted), the sale enters into a multi-offer situation.
In a multi-offer situation, the real estate sales agent is required to request all bidders to submit a best and final offer, and indicate when this offer must be submitted by. When submitting their offer, all bidders must complete a Multi Offer Form to acknowledge they are aware they’re in a multi-offer situation.
Wondering if the agent is telling you the truth that another offer exists? It’s important to note that according to the REIQ, “there are heavy penalties for agents who mislead or deceive buyers by telling them there are competing offers when there are not.”
So, say you have a deadline to submit your best offer by 4pm on Friday. It’s important that you do proper due diligence before submitting your offer to make sure you’re not paying too much and know what your upper limit is. Decide what other conditions you might be able to include to make your offer more appealing. These could be conditions such as a no-finance clause or a longer/shorter settlement depending on the sellers needs and motivations.
Get your absolute best offer in by no later than 4pm. Once 4pm passes, the Real Estate sales agent will take the offers to the seller and the seller can accept an offer if they wish. This may or may not be the highest price based on other conditions the seller might be looking for.
During the multi-offer period, the selling agent cannot disclose the offers to any party, and there is no further negotiation permitted during this period i.e. the agent/seller cannot go back to a lower priced bidder and ask them to increase their offer while the deadline is still active, or after it has closed.
Auction
With a Queensland auction the following applies
- The seller can sell their property before auction, on the day of auction, or (in the event the property is passed in) after auction.
- The reserve price and a settlement date are set to suit the seller with the buyer able to request terms around settlement date.
- It is illegal in Queensland for the seller or their agent to provide a price guide or a reserve price during an auction campaign. This gives the seller the chance to test the market.
- Once the reserve price is reached during bidding, the property will be ‘on the market’. The auctioneer does not have to announce when a property is on the market, but they are allowed to do so if they wish.
- The auction is conducted under the seller’s terms and conditions and is not subject to finance, building and pest clauses or a cooling-off period.
- The auction process creates a sense of urgency – buyers have a definite time frame in which they must act. Buyers see other interested parties as their competition rather than the seller.
- During an auction event, all bids are disclosed to all registered bidders and attendees. You know the price that other buyers are bidding at and willing to pay. There is transparency in the sale unlike the multi-offer.
- If the property doesn’t reach the reserve price, you can negotiate with the seller after the auction. If this leads to a sale within 2 days of the auction, you will not get a cooling-off period.
If you’re preparing to bid at Queensland auction and need some help developing your strategy, make sure you check out our Auction Bidding Guide for Queensland buyers.
Have any questions about methods of sale, or need some help with your Gold Coast property search or purchase? Book a call with Matt today.
DISCLAIMER: The information contained in this post is provided for general information purposes only. The information should not be used or relied on as a substitute for legal advice. If you require legal advice concerning a specific fact or situation, you should seek independent legal advice. Hemko accepts no liability or responsibility for any loss occurring as a result of anyone acting or refraining from acting on the basis of the information contained herein. Whilst Hemko has taken all reasonable measures to ensure that the information contained in this post is correct, Hemko gives no warranty and accepts no responsibility for the accuracy or the completeness of the information.