Short answer
For most Christchurch homes I recommend auction first, because it gives you an unconditional offer that can't fall through. A deadline sale is the better choice for some properties, and I explain which below. The right method depends on your home, your buyers and your timeframe.
When a seller asks me "auction or deadline?", I turn it back to them. Picture two offers on the table. One is unconditional: once it's signed, it's sold. The other has finance, building report and other conditions attached, and any of those can be used to walk away or renegotiate. Which would you pick?
Almost everyone picks the unconditional offer. That's what an auction is designed to deliver.
A real example: a Shirley home
Recently I sold a Shirley home unconditionally after auction. It had first been run as an off-market deadline sale, and three offers fell through. Every one of them was conditional. Every time, the buyer came back asking for a price reduction or an extension on their conditions.
We switched to an auction campaign. Buyers had to do their homework before the day and compete on the same unconditional terms. The result was a firm, unconditional sale. No more waiting, no more renegotiating.
When I recommend auction, and when I recommend deadline
- As-is properties, anywhere: auction. You want developers and flippers competing against each other unconditionally. On a deadline, one of them makes a higher conditional offer to beat the others, gets the property under contract, then starts chipping at the price when it's time to confirm. Auction stops that.
- Homes over about $650,000 to $700,000: auction first. Deadline is the second option.
- Simpler homes: a deadline sale can be a sensible choice, depending on the property.
- First-home buyers: they come to auctions too. If they love the property, they get bank pre-approval for that particular home and they're ready to bid.
The honest trade-offs
Auction isn't right for every seller, so here is what you give up.
- A smaller buyer pool. Buyers who need finance or building-report conditions can't bid unconditionally until that work is done. Some will do the work beforehand. Others will pass, and a deadline sale suits them better.
- Some buyers don't like auctions. A deadline sale or price by negotiation can feel less pressured to them.
- It needs preparation. Buyers do their due diligence before the day, so the property has to be well presented and the documents ready from launch.
If your home is likely to attract mostly conditional buyers, a deadline sale may get you the stronger result. That's a conversation worth having before you choose.
The mistakes sellers make
1. Thinking auction costs a lot more
Compared with a deadline sale, the extra costs are the auctioneer's fee and a LIM report. I'll give you the exact figures for your property before you decide.
2. Thinking you must sell in the auction room
There's no pressure to sell on the day. Your home can't sell below your reserve, and if it passes in, you can still sell it. You can also accept a pre-auction offer if it's right for you. I accept pre-auction offers, and we'll agree in advance what price and terms would make one worth taking.
3. Thinking a pass-in means it's over
A lot of sellers worry that if the home doesn't sell at auction, the campaign is finished. It isn't. If bidding stops below your reserve, I negotiate with the highest bidder in the auction room to try to bring them up to your reserve. If there's no sign they can get there unconditionally, the property passes in. Then we move straight to plan B: a deadline sale, or a price on the property online while the campaign is still live, so conditional buyers can make their offers.
How my auction campaign works, step by step
- Decide on auction and design a 3 to 3.5 week campaign.
- Launch on a Thursday, just like a movie.
- Three weekends of open homes on Saturday and Sunday, plus a midweek viewing on Wednesday or Thursday.
- Feedback and vendor support every Tuesday, so you always know where things stand.
- Auction midweek campaign meeting to go over what's happened, what kind of buyers are coming through and what price feedback we're getting.
- Tuesday and Wednesday before auction, I gather everything I can: who's bidding in person or over the phone, auction bidding forms, and any changes buyers want to the sale and purchase agreement, like the settlement date or deposit, handled in an aside agreement.
- Reserve-setting meeting on the Wednesday. Your reserve is your happy price, the amount you'd be genuinely pleased with, not your grumpy price. We aim to set it high.
- Auction day, Thursday from 10:00am.
- If bidding stops below reserve, I negotiate in the room with the highest bidder to try to reach your reserve. If they can't get there unconditionally, it passes in and we go to plan B.
How this fits the Sam & Co. Method
Auction is the Sam & Co. Method in action. It's engineering demand: buyers compete on the same unconditional terms, on the same day. And it's negotiation firepower: I'm not going to let a buyer win with a conditional offer and then undercut your price later.
Not sure if auction or deadline suits your home?
Send me your address and I'll tell you which method I'd use and why. Free, no obligation. Or call me on 020 451 5077.
Request a free appraisalCommon questions
Is auction more expensive than a deadline sale?
There are some extra costs, mainly the auctioneer's fee and a LIM report. I'll confirm the exact figures for your property before you commit.
What happens if my property doesn't sell at auction?
You can still sell. In the room, I negotiate with the highest bidder to try to bring them up to your reserve. If they can't get there unconditionally, it passes in and we move to plan B: a deadline sale, or a price on the property online while the campaign is still live, so conditional buyers can make offers.
Do I have to sell on auction day?
No. Your home can't sell below your reserve, and your reserve is your happy price, the amount you'd be genuinely pleased with. You can also accept a pre-auction offer if it suits you.
Do you accept pre-auction offers?
Yes. We agree in advance what price and terms would make one worth accepting.
About Sam Singh
Sam is a Christchurch listing specialist with Harcourts Gold, selling across Christchurch and Canterbury, and the creator of the Sam & Co. Method. He speaks English, Hindi and Punjabi.