When you go to an auction, the bidders don’t know what the reserve is. 

The bidding starts low (below the reserve) and goes up. 

If the price goes above the reserve, the auctioneer will say the property is “now on the market.” That means the price is above the reserve. 

If you are the highest bidder, but the price is not above the reserve, here’s what happens. The auctioneer will pause the auction for negotiation. This means they go between the buyer and the seller trying to get an agreement. 

If you do get an agreed (negotiated) price, the auctioneer will then open up the floor for more bids. If you’re still the highest bidder, you’ve won.

If you win the auction, the sale is unconditional. You’re committed, and you’ll usually pay a deposit on the day. This means buyers must have their finances pre-approved and be ready to move quickly. 

There’s no room to add conditions like “subject to finance” or building inspections – like with other sale options. 

For sellers, auctions can create a competitive environment that drives the price up. But they also involve upfront marketing and auctioneer costs, and there’s no guarantee of a sale.

More from Opes:

• How To Get Top Dollar When Selling Your Property in Today's Market
• What is a deadline sale?
• Buyers market vs sellers market – what's the difference?

Deadline sale

A deadline sale is when a seller lists the property and says “I want all offers by X date.”

Now, the seller can accept an offer at any time. So, the property might sell earlier than expected (if the seller gets the right offer).

This flexibility benefits the seller, who can decide whether to wait and review all offers on the final day, or jump at a strong offer early on.

For buyers, this means you have to be proactive and get your offer in quick. 

You don’t want to miss out by waiting until the deadline. Deadline sales don’t usually include a price, so it can be tricky to know what to offer without guidance.

While deadline sales are similar to tenders, the key difference is timing. 

A tender only allows offers to be reviewed after the deadline, while a deadline sale can wrap up at any point.

Tender

A tender is a silent competition. 

Buyers submit confidential, sealed offers before a specified deadline. 

These offers are all opened after the deadline has passed. That gives the seller the chance to compare these offers all at once.

Tenders are particularly useful for sellers who don’t want to publish a price. This works well for properties that are harder to value. For instance, if your property has a unique feature.

From a buyer’s perspective, this process can be stressful. You don’t know what others are offering. You only get one shot, so your best offer has to be on the table straight away.

The seller can then either accept one of the offers outright or use them as a starting point for negotiation.

Price by negotiation

This is the most flexible of all sale types. 

There’s no deadline and no formal process. The seller simply considers offers as they come in. 

The property can sell at any time, and there may not be an advertised price.

If you’re a buyer, you’ve got to be decisive. 

If someone else makes a conditional offer that’s accepted, your offer will have to wait in line unless that offer falls through. 

And because there’s usually no price guide, it can be hard to judge how much to offer.

For sellers, this can mean a slower process. But it also opens the door for negotiation and conditional offers, so you might receive offers that aren’t possible through an auction.

Advertised price

Finally, you have advertised price. You see this online in 2 ways. Some listings will say:

• “Asking price: $1,000,000”, or
• “Buyers’ Enquiry Over $850,000”

I’m lumping these two together because they both happen when sellers say the price they are targeting. 

The good news about this is that you as the buyer have a sense of where the seller’s head is at. Then you can start negotiating from there. 

From a seller’s perspective, this helps them weed out buyers who may not want to pay the price they want. 

Practically these work exactly like a Price By Negotiation. The only difference is that the seller is disclosing the price they want. 

What about off-market deals?

Finally, there are also off-market deals. 

When most people think about buying (or selling) property, they think about Trade Me.

It’s a massive platform with tens of thousands of listings. It shows you what properties are publicly available.

But that’s not the only way to buy property. You can also purchase off-market.

Off-market properties aren’t advertised publicly. 

Instead, they’re shared directly through networks. This could be through real estate agents, developers, or property investment firms. 

These properties don’t appear in Trade Me searches, so you won’t come across them by chance – you need to be connected to the right people or companies.

The process of buying off-market is a little different. 

Rather than browsing listings, the journey often begins with discussing your goals with a professional. That could be a property coach, mortgage broker, or financial adviser. 

Based on those goals, they’ll recommend properties that fit with your strategy. That way you don’t have to chose from a pool of listings yourself.

What is the right choice for me?

The right method for you depends on whether you’re a buyer or seller, and your own situation. 

Let’s say you’re a first home buyer. Often, you’ll want to stay away from auctions. You often can’t afford to go through due diligence over and over again. And you typically have a limited budget. 

So price by negotiation and deadline sales are usually the way to go. 

But, if you’re a seller and want the highest price as quick as you can, an auction could be the way to go. 

On the other hand, if you are a property investor and want to buy New Build properties, going off-market is often the way to go.