A Simple Guide to the Methods of Sale
When it comes to buying or selling property in New Zealand, the method of sale can often influence the process and outcome. Certain homes, price ranges, and circumstances will influence the best campaign option and we will often tailor a campaign to suit the vendor and the market better. There are times when we will recommend different campaigns based on the vendor and not the property. Here’s a breakdown of the four main methods of sale – Private Treaty, Deadline Sale – Private Treaty, Tender, and Auction, and what they mean for you.
Private Treaty
A private treaty sale is a standard method where the property is listed at an asking price or price range. Buyers can make offers anytime, and the seller has the flexibility to accept or negotiate.
Why vendors like it: Great for builders if selling off plans or the like.
Why buyers like it: Gives them time to negotiate as they often have conditions.
Deadline Sale – Private Treaty
In a deadline sale, buyers are invited to submit their best offer at or before a specified date and it is written on a standard Private Treaty agreement. This helps create a sense of urgency and often encourages strong, competitive offers. However, the seller isn’t obligated to accept any of the offers, and buyers have greater flexibility to pull out of an offer if not accepted.
Why vendors like it: Greater chance of getting more offers than most other campaign styles. Provides flexibility to review all offers and negotiate with the most favourable buyer at their discretion.
Why buyers like it: It offers clarity on the timeframe, allowing them to plan their decision-making process but has greater flexibility to have conditions.
Tender
The tender method is written on a Tender document similar to a deadline sale in its execution but with stricter terms. Buyers submit confidential offers, including conditions, in writing by a specified time and date. The seller then reviews all offers and selects the most favourable one, though they are not obligated to accept any.
Why vendors like it: Ensures privacy and allows time to carefully review offers, harder for buyers to withdraw their offers.
Why buyers like it: Less chance of time frame for sale being brought forward.
Auction
Auctions are popular in competitive markets, where transparency and quick results are priorities and where banks are more relaxed with lending. Buyers compete in real-time, and the highest bid (if it meets or exceeds the reserve) secures the property. Often when properties are sold without warranty banks won't lend to buyers who don’t have good equity which eliminates the opportunity to have other conditional buyers being able to participate so an auction provides a solid alternative.
Why vendors like it: It provides them with the ability to better dictate settlement dates and deposits. If there are buyers it can speed up the sales process. On occasion, it can create stronger sales prices due to bidding directly against buyers and also can reduce the negotiation process.
Why buyers like it: Auctions eliminate prolonged negotiations and the process is more transparent in relation to where other buyers see a property's market value at the same time.
Once you've decided on the best method of sale, preparing your home to impress buyers is key. Check out our blog, 5 Ways to Prep Your Home for Sale, for expert tips on getting your property market-ready and ensuring it stands out.
Not sure which method of sale is right for you? Whether you're buying or selling, Southern Star Realty is here to help you navigate your options. Contact us for a free, zero-pressure, no-obligation chat, and let's find the best strategy to meet your needs