Selling your house? Sales methods explained.
Thinking about selling your house, but confused over all those terms you hear?
Wondering about the different sales options you see out there, then here are some answers and explanations to commonly asked questions about the various methods of sale.
The most beneficial method of Marketing your Property is determined by the prevailing Market Conditions, Property type and Price Range, and vendors’ individual requirements and time frame.
Generally speaking, when the market favors the Vendor (Seller), i.e., more buyers than properties available, then Marketing without a price is the main preference, to remove the limitation of a price and create competition between 2 or more buyers to maximize your return.
MARKETING WITHOUT A PRICE
AUCTION:
No price marketing where an Auction date and time is set 3 to 4 weeks out from commencement of marketing, thereby enabling time for our marketing to reach all available buyers, and for them to view the Property either through Open Homes, or by appointment.
The terms of Auction require all bidders to be able to bid unconditionally, so any due diligence they require must be done prior to attending the Auction and bidding.
An auction reserve is set by you prior to the Auction, and once bidding on the day reaches that reserve and the hammer comes down, your property is sold unconditionally.
Netzone Auctions are conducted’ On Site’ – exactly where the buyers have decided they want to invest, and thereby raising the awareness of bidders to the properties advantages, at exactly the right time, Sale Time, and emotions often elevate the level of bidding.
TENDER:
No price marketing where a closing time and date is set 3 to 4 weeks out from commencement of marketing, and at that set time, any tenders received are opened and presented to the vendors. Tenders can be unconditional or conditional, and usually a 10% deposit is required to accompany the tender. A special tender form is used – a formal process.
When a property is for sale by tender, buyers give confidential written offers to the agent before a specified end date.
There may be a price indication from the seller and buyers can choose to offer more or less.
DEADLINE SALE:
No price marketing where a date and time is set 3 to 4 weeks out from commencement of marketing, when all offers are to be delivered to the Agent by.
This enables time for our marketing to reach all available buyers, and for them to view the Property either through Open Homes, or by appointment.
Deadline Sale has the advantage of not excluding 70% of buyers as the unconditional requirement of an Auction does, as offers may be unconditional or conditional, and as many buyers do have minor conditions, this broadens the number of buyers competing for your property.
When offers are received you may accept an offer, or choose to negotiate further with the most favorable.
Deadline Sale – Essentially the same as a Tender, but has the advantage of not being a strict formal process, i.e., not requiring 10% Deposit to accompany tenders, the normal sale and Purchase Agreement is used, and has the overall advantage of being an “easier “offer process for purchasers, with the vendor advantage of being able to sell prior to the deadline date if an acceptable offer is received.
In all sales methods above, we do make it clear that the Property may be sold prior to the closing date. This is so that if an offer is presented which is acceptable to you, it can be accepted if you wish.
NEGOTIATION:
No price marketing, no time limits, inviting offers at any time from commencement of marketing, and without the limitations of a disclosed price.
Offers may be unconditional, or conditional, and all are presented to you for your consideration and negotiation.
MARKETING WITH A PRICE
When the pendulum swings the other way, the market changes, and there are more properties available than Buyers, the market favors the buyer, then marketing with a price is the best method of marketing, unless the property is a totally unique offering.
Buyers like to know your price expectations up front so they know if your home is within their budget, and they are not wasting their time and money on reports and then find they cannot compete, (as often happens under Auctions and Tenders), and Banks and Insurance Companies are increasingly requiring Building inspections, etc., – and now, under these market conditions, we need to get all possible Buyers through your Home.
A range of the most probable selling price for your property is discussed with you, and an acceptable asking price is arrived at and clearly presented to the Market.
I trust this gives a broad outline of the most common methods of sale for Residential, Rural and Commercial Real Estate in NZ., however for any other information, feel free to call me.
Art Rolfe AREINZ – Netzone Real Estate Ltd.
