SELLING A HOUSE WITH A PRICE
Selling a house with a price advertised attracts conditional buyers who are unable to buy via the auction process. Sometimes they can attract higher sale prices.
With the price advertised, it can be easier for buyers to get finance from the bank because it is clear how much is needed and buyers know what they are budgeting for.
Having a price-listed house is a good tool to have in a flat market (as opposed to a rising one) because it gives certainty to all parties. It is also likely to attract the buyers who do not like tenders, auctions and deadline treaties where properties are marketed without a price.
When the market is hot and listings are in short supply, selling without a price can reach higher than expected sale prices but it's never a guarantee and heavily reliant on your choice of real estate agent.
How to sell your home for a prime price can be confusing if inexperienced. This independent real estate advice might help you prepare.
In the current market, selling priced, by tender or deadline tends to be more favoured over auctions due to fewer buyers turning up at auctions. This is reflective of the market as we approach the Election.
When a price is listed, buyers and sellers can still enter into negotiation over the price while effective marketing serves to attract sufficient buyers to create the competition that will help push the price up.
Find out what it costs to sell a house in NZ currently.
REAL ESTATE AGENCIES CAN FAVOUR ONE METHOD OF SALE OVER OTHERS
The method of sale chosen can depend on the company you engage to sell your house as they can favour different methods.
Some real estate firms strongly favour auctions while others prefer selling by price or a Buyer Enquiry Over (BEO) price.
However, it is important to have a method of sale tailored to your particular property type, condition, location and value – there is no one size fits all. For example, you may be selling a rental and giving notice or selling a property zoned for development.
In the end, the successful method of sale comes down to your real estate agent’s capability to read the market, launch a good marketing campaign and skillfully work with buyers on your behalf to get the best possible sale price.
Find out how vetted real estate agents are best regardless of the method of sale
SELLING A HOUSE WITH A PRICE LISTED
When a house is advertised with a price, there is no deadline by which time the property has to be sold. This method also comes under the heading Private Treaty. The seller can accept an offer at any stage of the process.
Selling a house with a price will likely exclude a lot of unqualified buyers who can't afford your property but it can attract conditional buyers and investors who can be more sure of their yield formula.
It is probably the least stressful of all methods of sale because everyone knows where they are at.
Many buyers look specifically for priced properties and don't like auctions or tenders because of the lack of transparency around price. The caveat to that is when someone really loves a property there is added motivation to purchase regardless of sales method.
When listed with a price, buyers may make an offer under, on or over the price the property is being marketed with, and there is more room for conditions to be set. In auctions, the buyer can only make written unconditional offers.
BUYER ENQUIRY OVER (BEO) AND PRICE ON APPLICATION (POA)
With Buyer Enquiry Over (BEO), the property is listed with a price and buyers are directed to make the offer over that.
BEO eliminates the cheeky offers that can be made otherwise.
However, when listing as BEO, the seller is still aiming to get as much over that price as possible and needs to have confidence their real estate agent will find out how much a buyer is actually prepared to pay to secure a property, rather than just working with the minimum price.
Buyers will often ask the real estate agent what offer will “get it across the line”.
The real estate agent should be working for the vendor so knowing how a real estate agent is going to respond to that question is something you should understand from the outset. It is one of the questions you should ask of a prospective agent as it can make a big difference to your end result.
Vendors get more assurance their real estate agent is an outstanding performer when they choose an agent who has proven competent through agent vetting.
Sometimes a house will be priced but this isn't made public and prospective buyers will be directed to contact the real estate agent to learn the price – Price on Application (POE). This is simply as its name suggests.
SELLING A HOUSE WITH A LISTED PRICE - THE PROCESS
Once you have engaged a suitable real estate agent and have their appraisal and/or a registered valuation, your property will be marketed. Once the sale is live, besides the ongoing marketing, it goes through the following process:
- Offers: Buyers make a signed offer on the standard Sale and Purchase form.
- Buyer conditions: Buyers can make conditions such as an expiry date for the offer, subject to finance and/or a property inspection, or on condition of selling another property.
- Seller conditions: Sellers can also attach terms and conditions such as chattels to be included or excluded and a settlement date on which they will be ready to vacate the property.
- Multi offer process: The real estate agent should advise buyers if they are competing with other buyers – in which case it turns into a multi-offer process.
- Other offers: If a buyer makes a written offer, the real estate agent could ask other interested buyers if they also want to make an offer, although the first one needs to be presented to the vendor within a reasonable time and it should be checked for a sunset clause.
- Best offers: In a multi offer process all buyers submit their best offer.
- In writing: There must be legitimate offers in writing for it to be a multi-offer situation.
- Buyer competition: The multi-offer process is designed to create competition between potential buyers.
- Negotiation: The seller and the buyer may go back and forth negotiating on price and conditions before reaching an agreement. Entering negotiations does not mean you have to sell it.
- Ongoing marketing: The seller can continue to hold open homes while negotiating with buyers.
- Withdrawing offers: A buyer can withdraw their offer at any time before it has been agreed and signed by both sides.
- Verbal acceptances: A verbal acceptance from the seller is not binding.
- Property inspection: The seller may need to provide access to their property so the buyer can do a property inspection
- Meeting conditions: Any conditions to be met by either buyer or seller are worked through.
- Sale and Purchase Agreement: Make sure you have read and understand the sale and purchase agreement.
- Legal work: Once an agreement has gone unconditional, most of the communication continues between the buyer and seller’s lawyer or conveyancer.
- Deposit: The buyer’s deposit is paid.
- Signing: Once both have signed the sale and purchase agreement it is legally binding.
- Settlement: The final payment is made on the settlement date.
If you need help deciding what method of sale would best suit your property, Get in Touch or phone 0800 789 532. We can help - and it's a genuinely free service
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- Best Independent Real Estate Advisors 2022 | BUILD 2022 Real Estate & Property Awards
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Article updated October 9, 2023 by Trish Willis | Member of Property Institute of NZ (IPAC) & Awarded Independent Property Advisor of the Year 2023 (PINZ)
