One question that needs answering early in the selling a house process is what method of sale to use, whether auction, tender, price listed or negotiation. Like other methods, a price listed sale has its pros and cons.
Which method is the best for your property can depend on the state of the market whether flat, rising or hot, while individual agencies can favour one method over another.
However, the method of sale is less important than who you get to sell your property as an experienced, proven competent agent for your property type, value and location can make a significant difference to the outcome - as can your careful preparation before going to market.
Never the less, it pays to understand the different methods of sale so you understand what your real estate agency is recommending so we have delved into selling a house with a fixed price, also known as price listed.
Pros of a selling a house with a price listed
- A fixed price gives certainty to buyers searching within what can be a broad price range on a real estate website and can entice them to take an interest due to this type of sale being less intimidating and easier to plan for.
- Buyers can also be attracted to this type of sale because it offers more transparency. No-price marketing can eliminate buyers who are put off by tenders and auctions.
- If the property is priced correctly it will attract a lot of interest.
- Buyers can feel encouraged to make offers as they have more certainty around price.
- Banks may be more inclined to lend to the buyer because their is clarity around price.
- Buyers can be eligible and serious because their price expectations are not mistaken.
- It can lead to a multi-buyer situation which creates competition among buyers who will need to put their best offer forward.
- Having a definite asking price also gives certainty for the seller, and with buyer competition can be negotiated upwards.
- Selling with a price versus selling at auction can be the best method of sale in a flat market (as opposed to a rising or hot one).
- This method gives more time for sellers to consider buyer’s offers without the pressure of a deadline.
- Listing with a price allows for the most flexibility for negotiation for both buyers and sellers.
- There is no deadline so less chance of listing for a second time as can happen if a house fails to sell by tender or auction.
- Offers are confidential unlike at auction.
- Potentially lower marketing costs than with auctions or tenders.
- The price can be adjusted throughout the marketing stage.
Cons of selling a house with a price
- If the property is overpriced and fails to sell it can damage the property’s image.
- Unless it is a hot market, buyers experience less urgency and have more time to shop around and view other properties. However, there can also be fewer competing properties in a flat market as vendors hold off selling.
- Because negotiation is the norm, buyers tend to put in a lower offer to start.
- Price can be negotiated down rather than up.
- Offers may be conditional whereas auctions are free from conditions.
- It could limit the amount the property sells for that it might have achieved under tender or auction methods.
- While the lack of deadline allows for a less pressured process, it can also drag out.
- Buyers might discount the property solely on the price whereas in a tender situation they might be tempted to make an offer.
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The real estate agent’s skills
Regardless of the method of sale, real estate agents need a range of skills to handle what are complex sales. These include:
- Commitment to giving an accurate property appraisal
- Good negotiation skills to get the best possible price for the vendor
In a multi buyer offer situation:
- the agent needs the ability to use buyer competition to drive the price up.
- the real estate agent cannot favour one offer over another but can advise the seller.
- the real estate agent needs to clearly explain the multi-offer process to both the buyer and seller.
- the agent must get your written consent if they or anyone they know wants to make an offer on a property. This is a conflict of interest and they should provide you with an independent valuation.
- if a buyer makes an offer before it becomes a multi offer situation, the real estate agent should let them know it has become a multi offer scenario and give them an opportunity to make a higher offer, and should also let buyers know if others pull out.
For more information on real estate agent competencies find out what makes a top real estate agent
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Page updated March 23, 2023 by Trish Willis | Member of Property Institute of NZ (IPAC)
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