Taking the time to understand the new rules on how to sell a house at Auction or Tender, is a game changer.

Failure to understand how your property’s development potential under the Auckland Unitary Plan could see you undersell your property by of tens of thousands, maybe even hundreds of thousands of dollars.

You’ve found the right information, at the right time.

By the way, it doesn’t matter whether you’re thinking about creating your own private sale Auction or Tender Campaign, or thinking about selling with an established Real Estate agent (pick me), the following information still applies, and will help you determine which process is more suited to the sale of you property.

how-to-sell-a-house-at-auctionNotice I said better for your home. Not necessarily for you, personally.

Here’s what I mean by that.

If you’ve previously tried to sell your house by Auction or Tender (either privately or with an Agent), and you hated the process, or it failed you in some way, please don’t let one bad experience be your sole judgement, “world-view” or opinion of Auctions and Tenders in general.

Look, I get it. It can be hellishly frustrating if your agent’s driving and execution of the Auction or Tender process has been average. And let’s face it, how would you know until after the event, right?

When implemented correctly, Auction and Tender are very powerful machines.

When I first started in Real Estate sales, my branch manager took me aside, and presented a comparison between an Auction campaign that failed to attract a bid (ugly), and a brand-new Mercedes Benz lying on it’s side in a ditch (really ugly), alongside a straight stretch of tar-sealed road, on a stunning summers day.

You see, both vehicles had crashed and burned. Badly. What made the difference was the person behind the wheel.

With that said, here’s the new rules on choosing how to sell a house at Auction or Tender.

Firstly, above all else, selecting a “no-price” marketing campaign is paramount to achieving your property’s maximum potential.

Price your home too low and you risk under-selling. Price it too high, and you risk sitting on the market for months. Lose, lose.

Without exception, no one, not even Agents can advise you with 100% certainty and accuracy on the selling price of your home, prior to going to market.

Having said, it is our lawful obligation to provide you with a ball park home appraisal value.

The truth is, the only opinion that truly matters on value, is the market’s. Every other opinion is just noise.

Therefore, wouldn’t it make sense to maximise your property’s value perception (ask me how), implement a no-price campaign backed by a killer marketing campaign (ask me how) and ethically influence the market to “duke it out” over your property, driving up the sale price? (Hint: Ask me how)

Think about that. Win, win.

There are two common types of no-price marketing.

Auction and Tender.

Aside from Price By Negotiation (there’s a time and place for PBN, but this isn’t it), all other no-price marketing campaigns are variations of either Auction or Tender.

It’s important to note each Auction or Tender campaign has a start and end date, so this naturally creates a sense of urgency and tends to spur buyers into action. Another overlooked, yet extremely valuable characteristic of Auctions and Tenders, is buyers compete against buyers to own the property, not the vendor.

So, how do we know which option is best suited to sell a house at Auction or Tender?

There’s a NEW Real Estate “bible” out, and it’s titled the Auckland Unitary Plan.


The Auckland Unitary Plan has been drafted to oversee Auckland’s growth and development over the next 25 years, facilitating an influx of around million new residents that require approximately 420,000 new homes to live in.

This means the development potential of many Auckland suburbs has changed significantly. Many properties that previously had little to no development potential, now have stacks.

This is massive, and you should be excited. Check your pulse if you’re not. This means options and opportunity for many Auckland property owners.

So before choosing an Auction or Tender campaign, we’ve got to determine beforehand any development potential your property might have. This extremely important info points to who our likely buyers will be, and how they’ll likely perceive value in your property.

As an example, let’s say you own a single-family, 3-4-bedroom home sitting on say, 784m2 in a new Auckland Unitary Plan “Mixed Housing Urban” location. Subject to applicable Auckland Council consents, you could potentially demo the existing home, and build 4, three level attached townhouses. Or, keep the existing home and build a duplex, or two detached houses. Maybe leave the original house, and build two, 2 storied homes at the back.

Then there are those folks who just want to buy, move in, and enjoy the home as it is.

There you have four purchasing and development scenarios for one property. Four development scenarios mean four different buyers, and each will value it differently, because they’ll have a different buying agenda.

Let me explain …

  1. First, you have a couple who’ve recently married and have money gifted to them from family to get started on the Real Estate ladder. They’re planning a family and they want the Kiwi dream. A single-family home on a full site with a back yard, vege garden and clothesline. They’ve fallen in love with the house and WANT it, bad. Emotion is high, and they might be prepared to pay a premium to secure it.
  2. Next you have an investor. Investors are forever wanting to pay as little as possible because they buy on the numbers. They buy and hold, and are always looking to secure cashflow positive or at the very least, cashflow neutral property from day one, so it costs them little to nothing to keep. Investors do their best to take emotion out of their buying decision and only purchase if it fits their buying criteria. They may look at developing the site down the track, but for the moment, the goal is neutral/positive cash-flow.
  3. Then there’s our executive couple. “DINKs.” Double Income No Kids. They’ve got serious time on their hands and good expendable income means good cash flow to evolve into weekend property developers. They’ll look at the existing house as something they can add value to by doing up, while living in it, and build two townhouses out back to sell off, helping them become mortgage free, fast.
  4. Let’s add Mr Professional Property Developer to the buying mix. He wants to demo the house, or sell it as a relocatable home and build as many three level townhouses as he can on the one site, sell ASAP, and move on to the next project. He’s all about turnover. He’ll no doubt try and secure for the least amount possible, but is generally a little more flexible on his terms. Like an investor, the property is valued by the return on investment, but the developers buying rules are different. There’s no buy and hold here, so it’s likely they’ll pay more than an investor to secure the right property to develop.

As you can see, each potential buyer values this property in their own unique way, because they’re all buying for different development reasons.

What’s more is that I’ve only just scratched the surface on buyer profiling. baby-boomers-on-how-to-sell-a-house-at-auction

Who else is out there?

Baby boomers are retiring in droves. Some them may leverage their retirement income to buy, develop and sell.

Different buying rules again. Because they’re using their retirement income, these folks are fairly risk averse.

So tell me, which option do you think is the better no-price campaign option for selling in this instance?

Auction or Tender?

If you guessed Tender, go to the top of the class.

The Tender process is like a silent Auction. When a Tender is offered for any property, it is sealed in an envelope, and placed into the Tender box where it will sit under lock and key, until the Tender close off date. Only the Real Estate Agent facilitating each contract along with their respective buyer know the contents of their Tender.

All Tenders remain confidential, and it’s against the law for an Agent to reveal the contents of any other Tender offer.

Because each buyer perceives their own unique value for the same property, you might see submitted Tender offers differ by as much as $100k or $200k, or maybe even more, so a Tender campaign makes sense for this property.

Buyers are ALWAYS encouraged to submit an offer that’s close to, if not at the pinnacle of their budget, with few conditions, if any, because they’re competing against other buyers to own the property, and they may not have another chance to negotiate further.

When the Tender date has passed, all Tenders are opened and the vendor has the option to accept one Tender on the spot if it fits or exceeds their selling expectations, or they can choose to negotiate with one or all four buyers again.

Now, imagine if this property was marketed by Auction.

As an Auction is conducted in an open transparent forum, the buyer who was prepared to pay an additional $200,000 for the property, would now only have to pay $1 more than the previous highest bid to win.

Potentially, the vendor could lose out on tens of thousands, may be hundreds of thousands of dollars, by choosing Auction over Tender.

Does this mean Auctions are dead?

Crikey no.

It means for every Tender property out there holding 4 differing values to 4 or more different buyers, there’s also an Auction property with little to no development potential that holds SIMILAR value to 4 or more different buyers. The buyer who wins the Auction is the buyer who perceives greater value in that property than anyone else.

That’s the playground where premiums are paid, and street records are made.

Deciding on whether to go for Auction or Tender matters, significantly. But either way, you’ll still come out a winner if you have the right info and make the right choices throughout the entire process.

If you’d like to schedule an appointment with me to learn more about your property in relation to the Auckland Unitary Plan along with how the Auckland Real Estate market might perceive your property, please contact me directly on 027 254 6616, or email me at tim.webb@barfoot.co.nz.

I can research your property thoroughly, and schedule a 30 minute informative meeting to discuss your options, whether selling, or staying put.

By the way, you won’t get any pushy sales tactics from me, because this appointment is 100% obligation free.

Contact me right now, because the new rules on how to sell a house at auction and tender, have changed.


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