Deciphering Real Estate Selling Methods: Understanding Asking Price, Price by Negotiation, and Auction in New Zealand
When it comes to selling a house in New Zealand, vendors have several options to consider, each with its own set of advantages and considerations. Understanding the differences between asking price, price by negotiation, and auction can help vendors make informed decisions that align with their goals and preferences. In this blog post, we’ll explore the key distinctions between these selling methods to help you navigate the New Zealand real estate market with confidence.
Asking Price
Definition: An asking price is a fixed price set by the vendor at which they are willing to sell their property. It represents the amount the vendor hopes to receive for the property and is typically advertised in marketing materials such as online listings and property advertisements.
Key Characteristics:
– Fixed Price: The asking price remains constant however, it can be subject to negotiation.
– Transparency: Purchasers know the exact price the vendor is seeking for the property.
Considerations:
– Market Conditions: Setting the right asking price is crucial and requires careful consideration of market conditions, comparable sales, and property features.
– Purchaser Expectations: Purchasers may be deterred if the asking price is perceived as too high, potentially prolonging the time on market. However, a price set too low, means you could be missing out on valuable funds to move on to your next home.
*Please note that this sale method is usually only used at the end of the campaign once the market has shown where they see value in the property.
Price by Negotiation
Definition: Price by negotiation is a selling method where the vendor does not set a fixed price for the property. Instead, interested purchasers are invited to submit offers or engage in negotiations to determine the final sale price.
Key Characteristics:
– Flexibility: Vendors have the flexibility to consider offers and negotiate terms that suit their needs.
– Privacy: The interest in the property is negotiated on a one on one basis (no one else will know that you are putting an offer on the property.
– Negotiation Process: Purchasers submit offers, and vendors negotiate terms through their real estate agent.
Considerations:
– Market Feedback: Price by negotiation allows vendors to gauge market interest and adjust pricing accordingly based on purchaser feedback.
– Timeframe: Negotiations may prolong the selling process, especially if offers are not aligned with the vendor’s expectations.
Auction
Definition: An auction is a public sale where interested purchasers bid competitively to purchase a property. The property is typically sold to the highest bidder at or above the reserve price set by the vendor.
Key Characteristics:
– Competitive Bidding: Purchasers compete against each other in a transparent bidding process.
– Time Efficiency: Auctions have a defined timeline, creating a sense of urgency for purchasers to act quickly. Time to sell your property is often shortest with an auction campaign.
– Price Achieved: Auctions can lead to a higher sale price, as purchasers bid competitively to secure the property.
Considerations:
– Reserve Price: Vendors must set a reserve price, below which the property will not be sold. This can be adjusted at the vendors discretion and is kept private (only the vendor, auctioneer, and real estate agent will know the reserve amount)
– Market Conditions: Auctions are most successful when conducted properly in conjunction with your real estate agent to create high demand.
What to choose?
Understanding the differences between asking price, price by negotiation, and auction is essential for vendors navigating the New Zealand real estate market. Each selling method offers its own set of advantages and considerations, depending on market conditions, vendor preferences, and property characteristics.
It’s essential to work closely with a trusted real estate professional who has experience with all methods of sale and can provide guidance and support throughout the selling process. By leveraging their expertise and market insights, you can make informed decisions that maximize the value of your property sale.
If you’re considering selling your home and would like to explore your options further, feel free to reach out to Kristina today on 0274 777 382. Together, we can devise a customised strategy that meets your needs and achieves your goals.
If you’d like an idea of what your home is worth in todays market, you can generate a custom property report by adding your details to the form.