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An open-cry auction is a high-octane method of selling property: it's the V8 muscle car of the property world. It relies on the competitive nature of buyers and a tense, rapid-fire auction environment to drive up the price of your lifestyle property. Buyers are invited to the auction room (or onsite at your property) on a specific date, and are invited to start bidding on your property. The highest offer is the winner—as long as the reserve price is met as well.
Alongside traditional negotiation sales, it is easily one of the most popular methods to sell a home or lifestyle property.
Auctions can be effective for any kind of home, but particularly those that have generated a lot of interest from buyers for one reason or another. This might be due to a unique feature, a unique location, or something else entirely; if whatever your lifestyle block offers is in high demand and is hard to find, you can expect to get great results from an auction.
Note that auction sales are also unconditional, so you know you won’t need to deal with the hassle of additional terms and conditions from the winning buyer.
Take an auction, remove the open-cry and add in a longer timeframe for offer and you’ve got a sale by tender. This is a slightly rarer form of sale in New Zealand, but in some environments it has proven extremely effective for vendors.
Take an auction, remove the open-cry and add in a longer timeframe for offer and you’ve got a sale by tender.
Rather than shouting out their offers on auction day, buyers are invited to open homes, and then place their offers into sealed envelopes and submit them. These are then reviewed by the seller on a specified date, and the preferred offer is accepted. Unlike auctions, these offers might include conditions.
Tender relies on competition to get the best price for your lifestyle block, but unlike an open-cry auction, it doesn’t rely on multiple parties being present to keep the price high. Rather, it relies on implied competition: bidders don’t know what other bidders have put forward, so they won’t stop short of their best price just because the competition has dropped out.
This makes it ideal for lifestyle properties that have the unique features that would make it ideal for auction, but not as much built-up interest. It’s also less confrontational than an auction, so you may find that shy buyers are more likely to make an offer using this method.
Fixed-price sales are just that: fixed. You put your home up for sale, for a specific price, and buyers come to you saying they will meet that price. Negotiations, if any, are performed by your agent on your behalf, and may include some conditional terms. No auction day, no quiet offers, no need for multiple buyers. A fixed-price sale simply means you advertise a certain price, and your buyers are expected to match it.
This method is one of the most popular in New Zealand, and for good reason. It can be a lot faster than auction and tender, as your lifestyle block is open to offers straight away from the first day of marketing. Some buyers can also be put off by auctions, whereas an open sale is a lot less confrontational. Lastly, you’re also more likely to get offers that are close to your actual desired price, rather than auctions which can fall short on occasion.
Use Fixed-Price if you are confident in your price and want to sell sooner rather than later.
Consider the tender process. The main flaw is that you can only accept an offer once a certain date has been reached—even if you want to accept one sooner. This can be a significant problem for those who would prefer to have a faster sale. A sale-by-deadline removes that requirement. You can accept any offer at any time.
You can accept any offer at any time.
What’s more, you still retain the sense of urgency in that you give a specific date that the property will be sold by. If buyers don’t express their interest by that point, they lose out. That builds competition.
Much like tender, you don’t absolutely need a huge audience for sale-by-deadline; but it doesn’t hurt. Sale-by-deadline tends to get a very fast sale, as you can accept any offer at any time—but doing so might stop you from getting the best offer. If speed is your need, then use sale-by-deadline.
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