Auction, deadline sale or price by negotiation: which one?

What each method does

An auction sets a date, invites unconditional bids and asks buyers to do their homework before that date. The winning bidder signs the agreement and pays the deposit on the spot and cannot withdraw. There is no general cooling off period for a buyer of residential property in New Zealand.

A deadline sale invites offers by a stated date with no price advertised. Unlike an auction, the offers may be conditional, so a buyer can make an offer subject to finance, a builder's report or the sale of their own home.

Price by negotiation puts the property on the market with an advertised price or price range and takes offers as they come. Buyers can take their time, and so can you.

What the choice depends on

• How many buyers are likely to want it. Auctions and deadline sales rely on more than one interested party turning up on the same day. With a single buyer, a date does very little.
• How easy the property is to value. A house on a flat freehold site in a street with recent sales of similar homes can carry a price. Something unusual, a large site, a partly renovated house, an uncommon title, is harder to price, and a date lets the market set the number instead.
• How much certainty you need, and by when. If you have already bought, or you have a settlement date to meet, an unconditional sale on a known day is worth more to you than flexibility.
• Your appetite for a conditional sale. A conditional offer can fall over when the condition is not met. An unconditional one cannot. Auction gives you the second. Deadline sale and negotiation usually give you the first, with the wider group of buyers that comes with it.
• The marketing you are willing to fund. A dated campaign concentrates the spend into a short window. Marketing is charged separately from the agency fee and the spend should be agreed in writing before the campaign starts.

The decision is yours

The choice of sale method is the vendor's, and it is agreed in the agency agreement before anything is advertised. An agent can recommend one, and the reasoning should be about your property and the buyers for it, not a general rule about what works.

You can also change course. A property that passes in at auction can move to negotiation the same day. A deadline sale can end early if you accept an offer before the date and the campaign was advertised that way.