Different methods of buying and selling property
There are several methods of buying and selling property in New Zealand. It is important that you understand the particular process for the property you are buying or selling. Practices also vary between agencies so make sure you confirm details with them.
Buying and selling by Auction
An auction is an open process where buyers bid against one another to purchase a property. If you are selling a property by auction, you will need a sole agency agreement with an agent, have an agreed marketing plan and establish a reserve price in advance of the auction.
Advantages of selling by Auction:
- Builds urgency and a purchase deadline amongst buyers
- Creates a competitive transparent purchasing environment
- Finds a true ‘cash’ buyer with no conditions
- Provides complete control for seller – you set the terms
- Option of accepting offers prior to auction
- Removes risk of under or over pricing
- Focus is on the property and not the price
Buying and selling at an advertised price
This is when the property is marketed with a selling price – the amount the seller wants to be paid for his property.
Selling by Negotiation
This is decided by the seller in discussion with the agent, taking into account the seller’s views and the agent’s appraisal of the property’s value. The seller will also agree a marketing plan with the agent. Selling by negotiation removes the need for you to set a sale price for your property, instead placing the decision in the hands of buyers. An offer for your property can be received at any time. You then can accept, decline or negotiate with the prospective purchaser.
The tender process has a set deadline for prospective purchasers to put forward their best offer for your property. After the close off date you have the option to accept, decline or negotiate any offers. Due to this level of flexibility some prospective sellers consider tender as a viable option.