How does Openn Negotiation work in the Cairns Real Estate market?

Tuesday 11 Aug 2020

Where did Openn Negotiation come from?
One thing that the Coronavirus has certainly done for many industries is to force us to look at how things are done and improvise new methods for continuing to do business and Real Estate is no different. Faced with restrictions on open homes and just getting out to meet people being severely impacted means that we constantly need to keep evolving. Peoples needs for housing has not diminished and, as the world keeps spinning, our efforts at meeting those needs must therefore be evolving as well.

As a business that understands the complexities of the market, we started looking at different methods of sale that would allow us to not only develop more competition for properties (more competition = higher prices) but also roll with any ongoing Covid 19 punches or legislative hangovers.

As we cast our eyes over the myriad of new tech that seemed to be springing up (anyone heard of Zoom before the Pandemic??), we saw a platform being developed and utilised right here in Australia that has the capacity to allow us to create more competition and future proof our business as well.

How did “Openn Negotiation” start?
There is not much you cannot do on the internet these days, including buying land or a property. Openn Negotiation offers a simple online bidding process designed to be transparent for both buyers and sellers. Openn Negotiation began in the same way many other revolutionary innovations occur: through the need for a better way of doing things, for everyone’s benefit. This was something that the Real Estate market really needed, due to the challenging market conditions and general frustrations with the selling process. The online auction system came about after the Openn Founders gathered the years of feedback from buyers, sellers, and agents on the traditional sales processes. They reflected what barriers stopped buyers from engaging in the sale and spoke to agents about lack of buyer commitment during the sales process.

WHAT IS OPENN NEGOTIATION?
Managed entirely by a real estate agent, Openn Negotiation is Australia’s trusted property sales platform — combining components of traditional selling methods and technology to allow greater transparency, flexibility and ensure the best possible sale outcome is achieved.

An Openn Negotiation is conducted entirely online, where pre-approved buyers can start bidding from day one. The leading bid can be shown on all real estate advertising portals - even if it is lower than what the seller wants.

The sales process is very flexible as vendors can choose to allow buyers with conditions to participate and bring the final bidding stage forward to sell the property quickly.

The entire process, including the signing of all documentation, can be operated on a smart device from anywhere in the world.

All bids are binding, so once the hammer has fallen, the auctioneer has the authority to sign the final contract and complete the sale.

How does Openn Negotiation compare to existing methods?
A private treaty sale is when a property is advertised as being on the market and prospective buyers make their offers directly to either the seller or their agent. A private treaty sale is a transaction in which “a property is listed with a price or price range, and no set deadline on the expiry of the sale”.

A real estate agent will help to facilitate a sale or purchase in several ways, such as: 

  • Giving the seller an idea of current market conditions
  • Advising the seller on when to sell their property, and at what price 
  • Facilitating any marketing/advertising of the property, such as ‘dressing’ the property for sale
  • Letting the seller know when an offer has been made and then negotiating with the buyer to a point that both parties agree to sign a Contract of Sale

A real estate auction is a public sale of a property, usually conducted by an estate agent acting as an auctioneer, and is governed by strict rules. The auction is advertised for a specific place, time, and date. Prospective buyers bid on a cash unconditional basis and the property is offered to the highest bidder once the reserve has been met.

Combining the best elements of Private Treaty and traditional Auctions, the Openn Negotiation platform method ensures that a ceiling is not placed on the properties potential value and creates an air of competition between interested parties during the set sale period.  Buyers can make conditional bids eg finance and building and pest clauses and see their and other offers in real time on an online bidding platform. Bids can be increased until the reserve is met and then the property will be sold to the highest bidder. Furthermore, if there is an early bid that is acceptable to the seller, then that bid can be accepted. As well as the reserve being changeable right up to the Final Bidding Stage.

How does Openn Negotiation work?
The Openn negotiation timeline – click the link below

https://youtu.be/X33VxqFDv7I

 

YOUR PROPERTY IS LISTED FOR SALE
Your agent uploads your property to the Openn Negotiation platform and any other browsing portals to begin the campaign.

SELLER APPROVAL
Interested buyers will enter their pending price and submit their terms and conditions for you,  the vendors consideration and approval.

Once you've signed the documentation, their pending price becomes a live bid and they're qualified to participate in the Openn Negotiation.

The Openn Negotiation process has two stages:

  1. The Campaign Bidding Stage
  2. The Final Bidding Stage

The Campaign Stage is from the time of listing until the Final Bidding Stage starts. This is when the agent is qualifying buyers, holding home opens and inspections. Only qualified buyers, approved by the Seller, can participate in the Final Bidding Stage. The Seller can choose to change the reserve price and the Final Bidding Stage date throughout the Campaign Bidding Stage.

COMPETITION BEGINS!
Now you can sit back and watch the process unfold from your device in real time! You'll be able to see how long until the Final Bidding Stage begins and stay informed on how the campaign is progressing.

What is the Campaign Stage and Final Bidding Stage? 
The Campaign Stage is from the time of listing until the Final Bidding Stage starts. This is when the agent is qualifying buyers, holding home opens and inspections and buyers are able to enter their pending price. Buyers can improve on their bid at this time, once qualified. 

The Final Bidding Stage is the final stage of the Openn Negotiation where no more new buyers can be accepted and an initial five minute countdown timer displays on the screen waiting for the next bid. 

During this stage, each time someone bids, the bidding clock resets and allows two minutes for any other bidder to make their next bid.  

The two minute clock is designed to give buyers multiple opportunities to bid and provide plenty of time for you to determine your next bid. 

Note that the agent, who is usually sitting with the owner, can pause the negotiation if required and speak to the owner to set new bidding increments, determine when the home meets the reserve or reduce the reserve if required, call the buyer direct to encourage an additional bid or determine if you are out of the process. 

If the Agent sees the bidding slowing down, they can reduce the bidding increment just as you’d expect with a traditional auction and when the bid increment is adjusted, the two minute clock restarts, to give all buyers a chance to bid at the lower increment.  

Once the reserve price is met, a large red banner will appear announcing the property is on the market and will sell! 

After the clock runs out; if the property has reached reserve, it has sold to the highest bidder or if it has not met reserve it is passed in and the Agent will continue negotiations with the bidders.  

 

 

KEY BENEFITS FOR SELLERS
https://agentsupport.openn.com.au/support/solutions/articles/35000149986-video-benefits-for-sellers

  • Doesn’t allow overpricing 
  • Captures a wider Buyer pool (by allowing bidders with conditions to participate)
  • Sellers can choose which Buyers they accept
  • Enables qualified Buyers to compete with transparency
  • Most properties are sold within 4 weeks 
  • A low one-time fee of $550 incl GST

KEY BENEFITS FOR BUYERS
https://vimeo.com/316933966

REAL TIME BUYER COMPETITION
https://agentsupport.openn.com.au/support/solutions/articles/35000150286-real-time-buyer-competition-achieving-44k-over-reserve

COMPARING SALES METHODS
https://cdn2.hubspot.net/hubfs/4204947/WebBook%20Resources/Other%20Resources/OP215_4PP_A4_SALESMETHODS_FA_SALE.pdf

We are ready to go
As the only certified Openn Negotiation agency in Far North Qld and with over a billion dollars transacted in real estate sales around Australia, First National Cairns Central and Cairns Beaches are the experts in utilising this proven technology to benefit both buyers and sellers. Call us to find out more on how we can help you maximise your biggest assets in the shortest time frames.

CLICK HERE TO SEE HOW FIRST NATIONAL CAN HELP MARKET YOUR PROPERTY

Shane Dennis – Licensed Real Estate Agent