- Posted By Sales Office
Open negotiation aims to combine the three common methods of sale typically used in WA; for sale by private treaty, auction and tender.
How Open Negotiation works
Open negotiation works by inviting buyers to submit offers with conditions of their choosing in the lead up to a predetermined date of purchase (a little like a tender). If the seller approves their terms and conditions, they can then participate in the open negotiation via the ‘Openn’ app.
Participating buyers are asked to submit an opening bid. The first opening bid sets the advertised price for the property and if a higher opening bid is submitted than the first one, this becomes the new advertised price.
The appeal of open negotiation is that it is a transparent method of sale, which allows buyers to view all bids, the number of bidders involved and how much time they have left to bid. This continues until a final unchallenged bid is made that is above the reserve price.
How does it compare?
You may think this sounds like an auction. There are definitely some similarities between the two, for example the method requires a licensed auctioneer to oversee the process. One of the biggest differences however, is that open negotiation allows for each buyer to have pre-agreed different conditions of purchase. By comparison, at a public auction, the terms of purchase (i.e. deposit amount and settlement terms) are the same for all buyers.
Open negotiation also differs from the common private treaty ‘for sale’ method by revealing the price of each buyer's offer to all other participating buyers. When buyers compete for a property under private treaty, the details of each offer are usually confidential. Open negotiation on the other hand is completely transparent for all parties.
While auction remains the most transparent method of sale, not all buyers can participate in the process. Open negotiation neatly fills the gap between a private treaty and auction sale.
How long is an Openn Negotiation?
An Openn Negotiation campaign usually lasts between 1 - 4 weeks, but properties can sell earlier if the reserve price is met early. Properties can sell as quickly as a few days!
Why should I use Openn Negotiation rather than traditional methods?
Openn Negotiation is a selling system that combines the best parts of private treaty/sale and auction. Some of the key differences are:
- Sell listings faster - Openn's average days on market is 30 days
- No cooling off - Openn falls under the Auction umbrella, buyers are pre-contracted and there is no cooling off period. You can take any bid, high or low from day 1 of the campaign and legally show the bids on all real estate portals during campaign. The vendors and buyers can monitor competing bids as they come in.
- More buyers can compete - Openn captures a wider buyer pool as buyers can bid with more flexible terms (subject to vendor approval)
- Stale listing strategy - Agents are reinvigorating lifeless listings and clearing otherwise stale stock.