Understanding the methods of sale

If you’re looking to buy a property or doing your homework before you sell, you would have spotted a variety of sales methods. It is important that you understand the process before taking the next step.

As auction specialists, many Harcourts listings are sold by auction. Other common methods of selling residential property in New Zealand are ‘by negotiation’ or ‘by advertised price’ and ‘deadline sale’. These all require you to sign a standard Sale and Purchase Agreement, which sets out the price and conditions.

 

Selling by auction

At an auction, the property is sold to the buyer with the highest bid after the seller’s reserve price is reached.

If you are selling a property by auction, you will need a sole agency agreement with an agent, and you must set a reserve price before the auction. The reserve price is the lowest price you are willing to accept for the property. The reserve price is confidential.

Buyers will receive an auction pack if they register their interest with your agent, and this will include a copy of the sale and purchase agreement and information about the property.

How to bid at an auction.

 

Selling by negotiation and deadline

  • A buyer can make a conditional or unconditional offer at any time when a property is being sold at an advertised price with no time limit.
  • In a deadline sale, a property is marketed for a set period with an advertised end date.
  • Price by negotiation may be used when it is hard to estimate the price a property is likely to sell for. Prospective buyers make offers based on their perception of the market value of the property and the seller will negotiate with them on price

 

Selling by tender

When a property is being sold by tender, buyers make confidential written offers to the agent before a deadline. Buyers’ offers may be conditional, and you can also attach conditions to the sale, for example, stating the settlement date or listing the details of the chattels that come with the house.

 

Understanding the multi-offer process

A multi-offer process happens when more than one buyer makes an offer on a property. This process is designed to give all potential buyers an equal opportunity.

A multi-offer process can also be used if a property has failed to sell at auction or in a tender or deadline sale process if a buyer has made an early offer. In these cases, an agent may initiate a multi-offer process where all interested parties are invited to submit their best offer.