WAYS TO SELL YOUR PROPERTY
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DISCOVER THE RANGE OF WAYS YOU CAN SELL YOUR PROPERTY
In New Zealand, there are many ways that home-owners can sell their properties. Team Davis offers this comprehensive guide, detailing the various methods open to potential sellers. Looking to learn more about choosing the right method? Speak to a Team Davis Property Sales Consultant.
Sale by auction is an open process that allows buyers to bid against each other. The seller normally sets a reserve price prior to the auction, and the highest bidder to exceed this reserve becomes the new owner of the property.
The benefits of selling at auction:
All bidders are cash buyers – there can be no conditions on the offers and so sold means sold unconditionally.
Selling by Auction creates a sense of urgency as there is a fixed period of time during which your property is marketed at the end of which all potential buyers need to act if they want to secure it.
With multiple parties interested and bidding, the bidding becomes a competitive situation that usually results in a premium price being achieved for your property.
Sellers regularly consider offers made prior to the auction should the terms and conditions of the sale allow for it, but this must be advertised on all advertising material.
Buyers wishing to bid at an Auction need to register prior to the Auction, this way your Real Estate Consultant will know in advance how many interested parties will be in the room.
There is no ceiling on the price – no restrictions by advertising a price, this means you should achieve the best price on the day.
But you need to be aware that an Auction will automatically rule out some buyers from being involved as only UNCONDITIONAL buyers can bid.
This method is good to use when a property has something special about it that is hard to value eg. this might be the location which is highly sort after or even something the property offers over others even in the same location.
How the bidding process works
Once a bid exceeding the reserve price is made, your property is considered to be on the market and will be sold to the highest bidder.
Should the reserve price not be reached, the auctioneer will pause the auction and consult with you on the next step.
Should the bidding be close to the reserve price, many sellers agree to put the property on the market in which case the highest bidder receives the property. Alternatively, you can advise the auctioneer not to sell at that price, in which case the property is ‘passed in’. The auctioneer will then let bidders know that the auction is finished as the reserve price was not reached.
At Team Davis Property Sales Consultants, we would recommend that a vendor would then enter into negotiation with the highest bidder, allowing you the opportunity to sell the property on the day or soon thereafter. Note however that the offer may not now be an unconditional one.
In tender, buyers submit confidential written offers for your property. These offers must be made by a set date, and offers can be accepted prior to the advertised close date but this must be made clear in all advertising. No reserve price can be set but a price guide may be indicated.
The benefits of selling by tender:
While a Tender is similar to an Auction as far as Buyers having to submit a price, the key difference is that the Selling process is confidential and the Vendor can decide entirely which Buyer they wish to sell to.
There is still a sense of urgency as there is a fixed period of time marketing the property at the end of which all potential buyers have to act if they wish to secure your property.
Provided you make this clear in marketing material, sellers have the option of accepting an offer prior to the tender date.
You have time to consider the offers before you make a decision, you may not want to sell to the highest buyer due to who they are, so you can choose who you want to buy your property.
There is no ceiling on the price – no restrictions by advertising a price, so you should achieve a good price within the current market.
Here again a somewhat unique property that has a special something about it that is difficult to value is often best sold using this method.
Offers will be drawn up based on tender documents provided by either the seller or the solicitor. Should an offer be made prior to the close date of the tender, it is drawn up on a standard Sale and Purchase Agreement.
PRICE BY NEGOTIATION
Where it is difficult to estimate the price of your property, selling your property by negotiation may be valuable. It can also be useful when you want the buyer to have to think about what they are they prepared to pay for your property as opposed to how much less can they get it for when you advertise a price.
This sales method allows a buyer to make an offer based on what they believe your property is worth. Buyers are required to do their own research in order to make a judgement. When an initial offer is made you can then negotiate with the buyer with the help of your Real Estate Sales Consultant.
The benefits of selling by negotiation:
It allows you to set the price by comparing “like” properties and only selling when you are happy with the offered price and conditions.
It creates an opportunity to achieve a premium price for your property.
There is no time pressure on buyers or on vendors to sell unless they are happy with the terms and conditions to do so.
PRICE RANGE INDICATION
Properties can be marketed either by providing a pricing guide or an indication of your expected price range.
The benefits of selling with a pricing range:
It allows your home to be marketed to a wide range of buyers who can then determine what they are prepared to pay for your property.
Gives you the flexibility to negotiate price within a wider range with all potential buyers.
Helps your property appear extremely price competitive within the current market.
Be aware however that someone need only to offer you a price just over your starting range and unless you have a better offer they would expect you to accept this.
Properties can be advertised with a price. This method of sale still allows the buyer to negotiate with you on price.
The benefits of selling with a fixed price:
Can make buyers feel more comfortable as they have full knowledge of the vendor’s expectations and they can make an offer accordingly.
It is important with this method that your Property Sales Consultant has prepared for you good comprehensive market research and has the statistics to help set a fair and reasonable price.
DEADLINE OR SET DATE SALE
Deadline sales are similar to tender in that buyers are required to submit confidential written offers for your property by a fixed date, with offers able to be accepted prior to the date where communicated in marketing material .
No reserve price is provided but price guides can be indicated. The difference between tender and deadline sale is that rather than submit offers on tender documents, buyers are required to submit offers on a standard Sale and Purchase Agreement.
The benefits of selling by deadline sale:
The fixed period of marketing time creates a sense of urgency, encouraging all potential buyers to act.
Competition is heightened which can lead to a premium price where there are 2 or more potential buyers. (a Multi-offer)
All offers are confidential, so the vendor has the ability to decide who buys their property.
Vendors have the option of accepting offers prior to the deadline date as long as this is communicated in marketing material.
Vendors can consider the offers before making a decision. They can choose to accept or reject an offer. They can also choose to reject all offers if they are not up to their price expectation and they can choose to negotiate with any offer that they choose to.
No ceiling is set on price – no restrictions by advertising a price which means you should achieve the best price a buyer is willing to pay in the current market.
The most important thing to think about whatever method you choose to sell your property, is that YOU CAN’T SELL A SECRET.