You ever notice the boastful announcement by a Realtor/Agent/Broker with their listing that tells you, “Sold in 24 Hours!” or “Sold in 1, 2 or 3 Days!” where they project the illusion that something spectacular has taken place with the sale of the property?
How many of you have you ever given thought to what is the biggest problem with such a boast?
If this were your home being sold, would you be happy?
Unfortunately, many people have never explored what has taken place.
The problem with the private treaty (negotiated sale via Realtor/Agent/Broker) is that the method of selling presents numerous problems.
The problem is the nature of the sale itself. The Private Treaty sales process is about negotiating between parties, where the biggest aspect of the process being the right to void. We will outline some of the many problems with this sales method.
Who Controls the Sale?
Selling using the private treaty sales method places the Buyer in control of the sale by removing the right of first refusal from the Seller. When real estate is listed with a price, the Seller has made the initial offer and all the Seller can do is entertain counter offers. This places the control of the sale squarely in the hands of a potential Buyer.
A Time Indefinite Sales Process…
With the private treaty sales method, the Seller never knows if and when their home may be sold.
Private Means Just That – PRIVATE…
There is no transparency with private treaty sales with an Agent/Realtor/Broker. Offers submitted are just between the potential Buyer & Seller. With “multiple offers,” nobody knows what any of the other potential buyers are offering which makes it impossible for anyone else making offers to know what criteria is being used to decide upon the sale. Because it is all confidential, it could be anything you can imagine from price to any of the numerous contingencies, to the background of the people making the offer. Quite literally anything goes! There is NO level playing field for Sellers or Buyers with private treaty sales.
What Are Contingencies?
When the control of the sale is surrendered by the Seller, the Buyer is able to present offers that give them the ability to place conditions on the sale where the only limit is the imagination of the potential Buyer making the offer. What are some of the most common contingencies with selling via private treaty?
Notice to Perform – The Buyer gives Seller a limited amount of time to accept their offer. This offer is only good for the next 24 hours or any amount of time the people making the offer wants.
Home Sale Contingency – The Buyer requires Seller to wait for a period of time for the sale of their home before they purchase the property.
Inspections – The Buyer requires an inspection of the home to use as a tool to negotiate further reductions in the sales price for repairs and gives them opportunity to walk away from the sale.
Appraisals – The Buyer requires the home to appraise for the amount they wish to purchase often used for lending giving the Buyer the opportunity to walk away from the sale because they are not financially qualified to make the purchase.
Financing/Mortgage – The Buyer requires the financing/mortgage to be approved and gives the Buyer the ability to walk away if the loan is not approved.
Title Contingency – The Buyer requires a title search to use for possible objections for closing the sale of the property.
Final Walk-Through – The Buyer requires a final walk through to use as a way to find something to use to threaten not closing to reduce the final sale price or walk away from the sale.
Closing Date – The Buyer requires a date to suit their schedule for closing the sale of the property rather than it being a timeframe set by the Seller.
Speculated Values – Selling real estate via private treaty with an Agent/Realtor/Broker is based upon speculated value and not true market value. Just because one or another property has the same or similar number of bedrooms, baths, size of the living space or land and sold for one price does not mean another should. Why guess or speculate on a price?
Limiting The Sale Price – With a private treaty sale, the Seller can be certain that they will never know if they could have ever received more for their property. With the price set by the Seller and the right of first refusal being surrendered where only counter offers can be received and the sale being time Indefinite with the notice to perform, where all offers are confidential with many of the contingencies of inspections, appraisals, mortgage approvals, a final walk through, closing date demands, waiting for the potential buyers home to sell composed in an offer, the Seller will never have a level playing field for all potential buyers to openly have a transparent competitive bidding process climax with the highest bid being realized. Reason being is with private treaty sales, the potential Buyer has the control and leaves themselves a way to easily walk away.
Your Bottom Line!!! – Selling by negotiating with the aforementioned problems that can be expanded upon even further all are not bringing you the most money possible for your real estate. Do you really want to experience the nightmare of the game “let’s make a deal” of the private treaty sales method?
Don’t be discouraged! Smile and be of good cheer! Sellers of real estate can take control of the sale of their property and know they have eliminated the problems with private treaty sales methods.
So the next time you read of a property listing and being sold in 24 hours or a few days, you can know for certain that the Seller of real estate has experienced the guarantee and on-going torment of knowing that they will never know if they could have been paid more…
The good news is that you can have your property sold and pay a lot less commission, not pay closing costs, no transfer taxes, with no liabilities that can occur after the sale, in a timeframe that is definite, that will guarantee you top dollar, Contact Us Today!