The REIQ is often asked which is the most effective sales method when it comes to selling your home.
The Insititute recommends sellers use the exclusive agency method to sell residential property. This method is where the sale of the property is in the hands of only one agent, rather than an open listing, where the seller lists their property with a number of agents.
An exclusive agency is advantageous to the seller as the appointed agent will be dedicated to selling the property. This saves the seller the confusion of having to liaise with more than one agency at any one time.
Furthermore, this method will save the seller the time and money involved in advertising and marketing costs when a number of agents are trying to sell the property.
Under the Property Agents and Motor Dealers Act 2000, a seller can only appoint an agent under this arrangement for up to 60 calendar days. At any time during those 60 days the seller may decide not to renew the appointment if the property has not sold. The seller can agree to make a further appointment of up to 60 days, but the renewal cannot be made earlier than 14 days before the term expires.
Under any selling arrangement using a real estate agent, the seller and agent must sign a PAMD Form 22a – Appointment of Real Estate Agent (Sales and Purchases) in order to legally set the terms of the selling agreement.
An open listing is when the seller has the ability to list their property with a number of real estate agents in the local area. Under an open listing agreement, each agent can sell the property individually or work with another agent to sell the property. Only the agent that introduces the buyer to the property will receive the commission from the seller.
Selling by auction is also an exclusive agency agreement and is therefore also subject to the 60 calendar day agreement period. The auction process requires the seller to pay the agent to arrange effective marketing and advertising plans in order to maximise exposure of the property and the auction date to potential buyers.
Under the auction system, the seller agrees to pay commission to the listing agent if the property sells before the date of the auction, at the auction or in an agreed period after the auction.
There are many advantages to selling a property at public auction, in particular:
- The seller has the opportunity to sell their property before auction, on the day of auction, or in the event the property is passed in, directly after auction;
- There is an ability to set a reserve price and a settlement date to suit the seller;
- As the reserve price is not disclosed, it gives the seller a chance to test the market;
- A written marketing plan with pre-agreed appointment times enables the sellers to arrange their lives during the lead-up period;
- The auction process, by its very nature, creates a sense of urgency – buyers have a definite time frame in which they must act. Buyers see the other bidders as competition rather than the seller; and
- With sale by auction in Queensland, all contracts are unconditional and no cooling-off period applies.