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marketing strategies

There are varying reasons as to how to market your property factoring in the method that best suits your circumstances, and your property. Here are some matters to consider:

fixed price

Benefits

  • Buyers know what you will sell for, and whether the property is likely to fit their budget.
  • Buyers with conditions to satisfy can make offers, as can cash buyers.
  • Some sellers are more comfortable with a fixed price.
  • You can sell at any time within the campaign, rather than awaiting a 3-4 week deadline date.

Disadvantages

  • As a seller you risk the property being under-priced, or overpriced.
  • It is unlikely you will get more than the asking price (unless there is a multi-offer and the property is priced right in the buyer zone).
  • No time deadline to encourage buyers to commit.

by negotiation

I recommend “by negotiation” ideally only be used for a maximum two week period, and then a price advertised based on market feedback.

Benefits

  • No price so buyers don’t pre-judge based on price when making the decision whether to inspect or not.
  • Buyers with conditions to satisfy can make offers, as can cash buyers.

Disadvantages

  • Buyers sometimes perceive the price must be too high otherwise a price would simply be advertised.
  • No time deadline to encourage buyers to commit.
  • Some buyers may not make the call if there is no price indication.

tender (unless sold prior)

Benefits

  • No price so buyers don’t pre-judge based on price when making the decision whether to inspect or not.
  • Buyers with conditions to satisfy can make offers – thereby enabling the whole pool of buyers to take part in the process, rather than eliminating conditional buyers such as Kiwisaver (of course you can sell to cash buyers also).
  • Deadline timeframe 3-4 weeks to encourage buyers to commit to the property.
  • Competition between buyers.
  • Buyers don’t know what the amount of the other Tenders are, and should submit their best offer.

Disadvantages

  • The tender strategy must be managed effectively to ensure that any conditional Tender submitted, that is accepted, has a strong chance to succeed to become unconditional once conditions are completed.
  • Some buyers are unfamiliar with the process, and accordingly clear communication must be kept throughout the campaign so that the process is fully transparent for all parties.

auction (unless sold prior)

Benefits

  • No price so buyers don’t pre-judge based on price when making the decision whether to inspect or not.
  • Offers are cash.
  • Deadline for buyers to act 3-4 weeks.
  • Element of competition if you have more than one actively bidding buyer.

Disadvantages

  • Buyers with conditions (ie: sell a house/LIM/obtain finance/Kiwisaver) may not be in a position to bid on the day.
  • There is an additional auctioneer’s fee (ranging $400-$500 + GST).
  • Sellers may feel undue-pressure to make a decision on the day.
  • Buyers are only compelled to bid the next minimum amount to hold the highest bid, or if they have conditional interest (and can’t bid) but attend the auction, typically tend to only offer just over the last highest bid.