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High-Value Property Marketing “The case for pre sale offers”

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There are many different methods available for the marketing and sale of specialised high-value properties in addition to the traditional real estate listing arrangements of auction and tender type formats.

There are of course advantages, disadvantages and tradeoffs associated with every marketing approach; and the best strategy for the marketing and sale of a specific property will vary based upon the ownership objectives and the particular property.

One approach, which can be the optimal method in certain instances, is private, pre-marketing offers.

This sales technique can be advantageous to a vendor of a high-value property wishing to sell in a weak market that could otherwise be stigmatised or go stale from over-exposure.

High profile, specialty or trophy properties can quickly become “old news” with the traditional shotgun marketing associated with the prevalent publicly listed web-based approach of fixed price, auction or tender format.  

A widely advertised unsuccessful attempted at auction or tender of a high profile property that does not achieve its reserve price and fails to sell, can stigmatise it for a very long time; often years.

In a weak market, there are a number of properties that can best be offered privately first before giving them wide exposure.  A good example would be a specialty property that has a limited buyer pool due to its price expectation and or its remote location. 

In this case a vendor could be well advised to protect themselves from over-exposure by utilising a careful, private option approach first.  

Prospects can be prioritised and approached in a predetermined sequence.  Buyers are attracted to this approach because the basis for the offer is buyer specific and the appeal of the exclusive nature of the process.  In short, ego appeal.

If a property is not perceived as over exposed, buyers will listen to carefully presented, well thought reasons that are unique to their prospective ownership of a particular property.

The Private offer option is most effective when the asking price is derived based upon an expert and defensible valuation done by a third party (no conflict of interest) which will enable the salesperson to carefully walk a prospective purchaser through the various components of the property’s value.

Private marketing is all about a fair value proposition since there is not the opportunity to bid up the fixed price as in an auction or tender.  

With the public competition element removed, the private sale can result in well thought out rational decisions by a buyer and provide the buyer with more incentive to spend time and resources focusing on and understanding the asset rather than in a free-for-all marketing approach which can be a turnoff to high net worth buyers.  

Also, if the vendor is selling a portion of their landholdings there may be a concern as to who the property is sold to. ie who are the new neighbours going to be. A private sale can help identify a preferred buyer.

In some cases private offers can serve as the “plan A”; and if necessary then move to a “plan B” public listing, auction or tender approach if the private marketing to the identifiable players does not yield a sale. 

In this manner the general marketplace will be unaware the property had been confidentially on the market before; therefore, not perceived as a passed over property that just about everyone has seen.  

In this case, much can be learned from the private offer phase that can be invaluable in positioning it subsequently to a public sale. 

Auction – Tender – VendeRAPIDO- Options ( selling without a price )

There are indeed situations where the auction, tender or public listing format is the only option, such as cases where the vendor is not the owner, but a party responsible for the sale of the property. Deceased Estates, properties owned by Family Trusts, Corporate Assets owned by Public Companies etc. This can ensure fiduciary compliance. 

Another advantage of the auction/tender for many can be the fixed date for completion of the sale process, with timing coordinated with owner objectives.

A disadvantage of this process can be that potential purchasers can drop out due to their inability to comply with the conditions of sale. Ie timeframe, lack of bridging finance available etc. 

Conclusion

All methods can have their place but often the decision will depend on the access to a skilled salesperson in a particular process. ( Sadly few are skilled in the sophisticated marketing and selling techniques of selling without a price guide )

When the goal is to achieve an unconditional sale in a short time frame it is important that the vendor prepare ahead of time the following necessary information to make this possible:

Titles in order

Quality photography and or Video

Independent Property Valuation

Physical Presentation of the property

Tax status of the property regularised

Unsure ? then contact us for more detail on the options.

Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition.

www.gatewaytosouthamerica.com

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Geoffrey McRae

About Geoffrey McRae

Geoffrey McRae is the founder of GTSA - Marketing. He is a New Zealander with a strong Agro-business and Real Estate background spanning over 30 years both in his own country and South America. I hope you enjoy reading our news site. Please share it on your social media below.

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