When looking to purchase a property, you may be faced with different sales methods. The level of transparency around competition and Vendor price expectations varies between each method, which may influence how you, as a Purchaser approaches or structures your offer. Your Salesperson can provide guidance on the offer or bidding process, however, it is always good to have a personal understanding of these methods.
Auction
Auctions are a popular method of sale in the New Zealand Property Market. Auctions are a highly competitive process where potential Purchasers bid against each other for a property. A reserve price will be determined prior to the auction and this will remain private until it is met, the property will then be sold unconditionally to the highest bidder. Pre-auction offers may also be received. If this is at a level the Vendor is willing to accept then the auction may be brought forward with the pre-auction offer set as the opening bid, other interested parties can then bid to better this price.
Deadline Private Treaty
The Deadline Private Treaty (DPT) method presents the opportunity to the market for Purchasers to submit and offer for a property by a specified date. The DPT method is far less restrictive than the Tender process in that the property may be sold prior to the deadline and the Vendor does not prescribe terms and conditions. It is therefore not uncommon for Purchasers to submit offers with their own additions added and to further negotiate these with the Vendor.
Price by Negotiation
When a property is advertised as Price by Negotiation there is no set date at which offers must be submitted by, Vendors can accept an offer that at any time while the property is on the market. The Vendor will be looking for the most attractive offer possible and Purchasers have the opportunity to negotiate over price and any terms and conditions that have been made in the agreements. Be aware that this method can attract many potential Purchasers and the Vendor will pick the offer most attractive to them.
Tender
The Tender process involves a closed envelope bidding scenario, where potential Purchasers submit confidential offers with their preferred terms and conditions. There is a set timeframe which you must submit your offer by and due to the confidential nature of this process, Purchasers will not know what other offers have been made, bidding parties are thereby encouraged to place the most attractive bid possible. The Vendor is under no obligation to accept any offer and may choose to counter sign and negotiate.
Fixed Price
This is the most transparent method of sale that sees the property being advertised to the market with a Fixed Asking Price. There is no set deadline involved with this campaign and the Vendor can accept an offer at any time. The Fixed Price provides an indication to the market of the Vendor’s price expectations. However, offers above or below the Fixed Price may be presented and the Salesperson may engage negotiations to ensure an offer acceptable by both parties is achieved.
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