At Maximise Real Estate, we understand that selling your property is a significant decision, and choosing the right selling or pricing strategy can make all the difference in achieving the best outcome. Based in Northland, New Zealand, we specialize in maximizing your profit while keeping our selling fees low at just 1.95% (terms and conditions apply). Our team of local experts is here to guide you through the process with professionalism, energy, and dedication.
Below, we outline the most common selling strategies available in the New Zealand real estate market, including those we frequently use like auctions. Each method has its own advantages and disadvantages, which we'll explain in detail to help you decide what's best for your property and situation. We'll work with you to tailor the approach to your needs, ensuring regular communication and a stress-free experience.
1. Price By Negotiation
Description
Price by negotiation (also known as private treaty or sale by negotiation) is a flexible, ongoing process where the property is marketed without a fixed price or with an indicative asking price/price range (e.g., "by negotiation," "buyer enquiry over," or "price on application"). Buyers submit offers at any time, which the seller can accept, reject, or counter, with negotiations continuing until an agreement is reached or the property is withdrawn. There is no set deadline for offers.
Advantages
- Maximum Flexibility: Sellers can negotiate terms, conditions, and price directly with interested buyers, often leading to better outcomes through back-and-forth discussions.
- No Upper Limit Risk: Avoids capping potential price by not advertising a fixed amount, allowing serious buyers to offer higher if demand exists.
- Attracts Wider Buyer Pool: Draws both conditional (e.g., subject to finance or inspection) and unconditional buyers, as there's no pressure of a deadline.
- Market Testing: Sellers can gauge interest and value over time, especially useful for unique properties or uncertain markets.
- Lower Pressure: Less stressful than auctions or deadlines, with ongoing communication and the option to relist or adjust strategy without public failure.
Disadvantages
- No Built-in Urgency: Without a deadline, the process can drag on, potentially leading to fewer offers or buyer fatigue.
- Pricing Uncertainty: Buyers must estimate value themselves, which may result in lowball offers or hesitation if the market value is unclear.
- Extended Timeline: Sales can take longer than time-bound methods, increasing holding costs (e.g., rates, maintenance).
- Marketing Dependency: Relies on strong, sustained promotion to keep interest alive over time.
- Negotiation Complexity: Back-and-forth can be time-consuming and emotionally draining if multiple parties are involved.
2. Fixed Price
Description
A fixed price sale (also called advertised price, asking price, or sale by asking price) lists the property at a specific, set price. Buyers can make offers at or around that price, often negotiating slightly, and the seller decides whether to accept, reject, or counter. The process is straightforward and ongoing until sold or withdrawn, with no deadline or competitive bidding event.
Advantages
- Price Clarity and Transparency: Buyers know exactly what's expected, making it easier to assess affordability and decide quickly.
- Attracts Serious Buyers: Filters for purchasers willing and able to meet the advertised price, reducing time-wasters.
- Simpler Process: Less complex than auctions or tenders, with straightforward negotiations if needed and the ability to accept conditional or unconditional offers.
- Lower Upfront Risk: Often fewer intensive marketing demands compared to deadline-based methods, though good promotion still helps.
- Negotiation Opportunity: AAllows some flexibility to counter or adjust terms while maintaining a clear starting point.
Disadvantages
- Risk of Underpricing: If the price is set too low, the seller misses out on higher offers; if too high, the property may sit unsold and become "stale."
- No Urgency Created: Without a deadline or competition, buyers may delay decisions or shop around longer.
- Limited Competition: Lacks the bidding pressure of auctions or deadlines, potentially resulting in lower final prices in strong markets.
- Market Sensitivity: In a cooling market, buyers may negotiate aggressively downward; in a hot market, sellers might leave money on the table.
- Relisting Challenges: If the property doesn't sell quickly, it may require price reductions or re-marketing, which can signal issues to buyers.
3. Auction
Description
An auction is a public sale where buyers bid against each other in real-time, with the property sold to the highest bidder once the reserve price is met. Auctions are a popular choice for creating competition and urgency among buyers.
Advantages
- Competition Drives Price: Bidders compete openly, often pushing the price higher than expected.
- Fixed Timeline: Auctions have a set date, creating urgency and speeding up the sale process.
- Unconditional Sale: Successful auctions result in an unconditional contract, reducing the risk of the sale falling through.
- Transparency: The process is open, allowing sellers to see all bids.
- Marketing Boost: Auctions generate buzz, attracting more potential buyers through targeted campaigns.
Disadvantages
- Upfront Costs: Marketing and auctioneer fees are paid in advance, regardless of sale outcome.
- No Guarantee of Sale: If the reserve isn't met, the property may pass in, requiring relisting.
- Stressful Process: The public nature can be intense for sellers.
- Buyer Preparation: Buyers need pre-approval, which may limit the pool to serious bidders only.
- Market Dependency: Works best in hot markets; cooler markets may not generate enough interest.
4. Tender
Description
A tender is a private sale process where buyers submit confidential offers by a set deadline. The seller reviews all offers and chooses the best one, or rejects all if none meet expectations.
Advantages
- Confidential Offers: Buyers submit sealed bids, encouraging higher offers without competition visibility.
- Flexibility: Sellers can negotiate or accept conditional offers.
- Controlled Timeline: Set deadline creates urgency without the public pressure of an auction.
- Low Risk: If no suitable offer, the property can be relisted without stigma.
- Detailed Offers: Buyers often include terms, giving sellers more information.
Disadvantages
- Limited Competition: No open bidding, potentially resulting in lower prices.
- Marketing Costs: Upfront expenses for promotion, similar to auctions.
- No Guarantee: May not attract enough offers if market interest is low.
- Process Complexity: Reviewing multiple confidential offers can be time-consuming.
- Buyer Hesitation: Some buyers prefer auctions for transparency.
5. Deadline Sale
Description
A deadline sale (also known as a deadline treaty) is similar to a tender but allows for conditional offers and negotiation. Buyers submit offers by a set date, and the seller can accept, reject, or counter.
Advantages
- Urgency and Competition: Deadline creates pressure, often leading to multiple offers.
- Flexibility: Accepts conditional offers, broadening the buyer pool.
- Negotiation Power: Sellers can counter offers to improve terms.
- Cost-Effective: Lower upfront costs compared to auctions.
- Market Testing: Allows sellers to gauge interest without committing to a sale.
Disadvantages
- Deadline Risks: If no offers come in by the date, you may need to relist or extend, adding costs.
- Buyer Confusion: Some may mistake it for a fixed price and lowball offers.
- Marketing Dependency: Requires strong promotion to generate interest before the deadline.
- Conditional Challenges: Offers often include clauses, complicating unconditional sales.
- Market Volatility: Less effective if market conditions change during the campaign.
Ready to sell? Contact our team at Maximise Real Estate today to discuss which strategy suits your property best. With our low 1.95% fees and local Northland expertise, we'll help you maximize your return. Call us or visit our contact page for a free appraisal
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