MORE? WHO OFFERS MORE, WHO WANTS MORE, WHO HASN'T YET?
The bidding process is a sales strategy for property sales. Unlike a normal sale, where the target selling price is set by the vendor, in the bidding process interested parties place their bids for the property - similar to an auction. However, no minimum price is usually set, but you as the seller can do so. The bidding process originated with properties that have not been sold for a long time. Nowadays, however, it is also used in the opposite direction: to achieve the highest price for a property that is in demand.
Differences between bidding process, auction & sale
Even if it is often equated in public usage: The bidding process is neither an auction nor a house sale. The biggest and decisive difference lies in the obligations of the parties involved. In a bidding procedure, the owner of the property is not obliged to accept a bid. And the bids submitted are not binding either. Rights and obligations for buyers and sellers only arise in the bidding process when a notarised purchase agreement is concluded. At an auction, on the other hand, prospective buyers submit binding bids. In contrast to a house auction, the homeowner retains complete freedom of choice regarding the sale of their property through the bidding process.
However, not all bidding procedures are the same. A distinction is made between the following types, among others:
- Open bidding procedure: Works like an auction, where buyers are completely free and open as to which bid they place, as there is no minimum purchase price.
- Single-stage bidding process: The property sale only goes through one round and the property is sold to the highest bidder without renegotiation.
- Two-stage bidding process: At the end of the bidding period, all bidders are informed of the current maximum price. The prospective buyers can then submit a new offer.
- Structured bidding procedure: This type of bidding procedure is limited in time and is offered either with a fixed price or without a bid price
- In addition, there are numerous other methods and ways of getting the most out of your property. Simply get in touch with your trusted estate agent: www.we-net.ch
HOW DOES A BIDDING PROCESS WORK?
The rules of a bidding process can be customised. However, continuous communication with the prospective buyers is essential for a successful sale through a bidding process. They must always be kept adequately informed. As a rule, a bidding process is completed in a maximum of three months. The bidding process usually runs through the following sequence:
1. Selection of an expert estate agent to ensure that the bidding process runs smoothly and professionally. An experienced estate agent can already target potential buyers from their client database.
2. Professional valuation of the property, compilation of the relevant documents and preparation of an informative exposé.
3. Publication of the sale advertisement with reference to the bidding process.
4. Viewing of the property by all prospective buyers at a joint viewing appointment. This usually takes place as an open house event or as an open bidder viewing.
5. The prospective buyers submit their bids within a known bidding period.
6. The bids will be analysed after expiry. As the owner, you then decide whether to accept the bids submitted and which bid is suitable. If a bid is far below the property value, you do not have to accept it. You also do not have to decide in favour of the highest bid - as the seller, you are free to make your own decision.
7. Once the seller and buyer have agreed on the terms of the house sale, the purchase contract is concluded. The buyer and seller only undertake to pay the purchase price and transfer ownership once the purchase contract has been notarised.
ALTERNATIVE ONLINE BIDDING PROCEDURES
A now very common alternative to the conventional bidding process is the online bidding process. Here, prospective buyers can bid via a platform within a set time window. Your estate agent and you as the seller usually receive access data for a protected area and can respond to the bidders' bids. The respective highest bid is usually visible to all interested parties and changes can be tracked. The online bidding process is therefore particularly transparent. The time window in the online bidding process is significantly shorter than in the normal bidding process and should be reduced to a few hours. This allows you as the seller to achieve a high price in a short time and at the same time keep all parties involved continuously informed. The online bidding process is a very popular sales strategy due to its speed, simplicity and transparency.
ADVANTAGES AND DISADVANTAGES OF THE BIDDING PROCESS
The bidding process is an attractive way to sell a property quickly - both in a difficult market situation and when demand is very high. In many cases, it is time-efficient and brings a high selling price. However, due to the non-binding submission of bids, it harbours some risks for sellers and buyers. You should therefore carefully weigh up the advantages and disadvantages for your property sale. Rely on the experience and support of your estate agent.
Vadvantages
– Quick house sale, which is particularly advantageous when the proceeds of the sale are urgently needed.
– If high demand is expected, high sales prices can be realised.
– If previous attempts to sell have been unsuccessful, the bidding process is a good way of attracting interested parties.
Disadvantages
– The prospective buyer can withdraw his bid. As a result, there is a risk for the seller that the sale will not materialise.
– Not all potentially interested parties are willing to participate in a bidding process and are therefore excluded.
– If the bidding process is carried out without an experienced estate agent, the purchase price may be considerably reduced.
BIDDING PROCESS WITH BROKER
Your Advantages in the bidding process with a broker
– Good sales price
– More security through early credit checks of potential buyers
– Time saving
We will be happy to advise you on the bidding process and the sale of your property with WENET AG. Get in touch with us or visit us at one of our locations.
