One of the most interesting things about selling your Mosman home is there is only so much you can do as the owner in order to set the price.
The same goes for real estate agents. While we are experts in understanding what your home is worth and why, our job is to provide accurate estimates before letting the seller and the buyer, or the auction bidders, determine the exact final dollar amount.
This is because a real estate sale depends on the amount the buyer is willing to pay.
There are three ways to determine how much a buyer will spend on your Mosman home. Firstly, you can opt for private treaty, where you present a price to the market, then negotiate with buyers to determine the best offer.
Auction is another method, which puts buyer against buyer ‘in the ring’ to determine the current market value of your home. This technique is generally recommended in Mosman, where property is in high demand.
The final way to determine the price of your home is to invite expressions of interest.
Expressions of interest: What does it mean?
You may have noticed homes advertised for sale which invite expressions of interest rather than mentioning an ‘offers over’ or ballpark price.
Generally, expressions of interest (also known as EOI) are invited for properties which are unique, unusual or extremely high end. With these properties, offers can vary by hundreds of thousands, rather than tens of thousands of dollars.
How EOI works
The process for Expression of Interest sees buyers invited to inspect the property before submitting their offer and terms of purchase. A deadline is set for offers to be made so the process isn’t too drawn out. Usually this is between four and eight weeks.
Without a benchmark for price, the offers which are submitted may be substantially different. Once all interested parties have submitted their offer, negotiations can take place with the highest bidders.
A couple of things to note is that EOI offers can be conditional and based on the outcome of a building report. They are also subject to a cooling off period. This is different to an auction, where an accepted offer is final.
Also, a seller can accept an offer before the EOI end date if one comes in which they are happy with.
Why have an EOI sale?
If a property is really unusual, people will respond to it differently. An avante-garde mansion with striking architecture and bold colours may not be everyone’s cup of tea but could really excite some buyers.
By not setting a price guide or exposing buyers to each other at auction, you are maintaining the mystery. Buyers can put in an offer based on what they would be willing to pay, not what others are willing to pay.
Expression of Interest is also a good way to gauge what the market makes of an unusual property. Offers may vary wildly but the final buyer does not have to know they bidded far above anybody else.
With a very high end property, expressions of interest can also save the sale from coming down to small dollar amounts. Buyers are invited to submit their maximum offer then see what happens.
Is an EOI sale right for your property?
EOI has its benefits, especially if you and your agent aren’t certain about the value of your Mosman home. It can paint a picture of who would be interested in your property and what they are willing to pay.
With a set deadline, an EOI strategy can be a good way to limit the length of your sale. It can also give you ideas of how to improve the home’s appeal, should you get feedback which isn’t overly positive.
One thing to remember is that no matter how you sell your home, the way it is presented and the marketed is extremely important. Work closely with your agent to prepare your home for sale and expose it to as many buyers as possible so it attracts top dollar no matter what your selling strategy is.