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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.
  • Give Sellers a chance to “gauge” the market to ensure the right price is marketed and secured.

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 or a house to sell (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.
  • The pure nature of the Tender process encourages Buyers to submit their best offer.
  • As a Seller you don’t have to accept any of the Tenders submitted.
  • The Seller can chose to negotiate with any of the Tenders submitted also.
  • Unlike an Auction where a Buyer will likely only bid the minimum they need to to hold the highest bid, to secure the property; with Tender the Buyer MUST put their best foot forward to have an opportunity of securing the property.
  • The Seller has time [5 working days] to make a final decision on which Tender is the most appropriate for their circumstances so no element of pressure or stress to decide the best course of action. The Buyers’ Tender contains an automatic clause that undertakes that they will not withdraw their Tender for 5 working days after Tender Closing Day.

Disadvantages

  • Some buyers prefer Auction over Tender, as at an Auction they can “see” their competition.
  • There is the potential that a conditional Tender may not get to unconditional stage and simply “fall-over” on the condition date. From a Seller’s point of view, (a) a Seller will, in the majority of cases, negotiate in the first instance with a cash Tender (b) an experience Agent will be able to advise you on the conditions and chances of those noted conditions in the Tender being satisfied AND (c) it is best practice that any conditional accepted Tender should have a Seller’s escape clause.

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.
  • Once the hammer falls, the waiting is over and as a Seller you know the property is SOLD.

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.