When selling property, it’s crucial to be aware of all the possible sale methods as each approach can offer unique benefits. In real estate, the amount of complicated jargon and legal terminology can be overwhelming and make it hard to understand which approach is best suited to your situation.
One example of this is the term ‘deadline sale’. We’re often asked what a deadline sale is and whether it’s a good method of selling a home. That’s why in this article we explain exactly what a deadline sale is and how it can benefit the sale of your property.
The basics of a deadline sale
Essentially, a deadline sale is when a property is marketed for a defined period of time with a strict end date and no advertised listing price. Typically the property is put on the market about a month before the deadline date and buyers must submit their offers before this specified date.
The seller then chooses to accept or reject any of the submitted offers on the deadline date. And, if the property has been listed with ‘prior offers considered’, the seller can even accept an offer earlier than the closing date.
A standard sales and purchase agreement is used in a deadline sale, and offers can be both conditional or unconditional but are always confidential. There is also the opportunity for the seller and buyer to negotiate the terms of an offer before it’s accepted or rejected.
The benefits of selling a house via a deadline sale
Now that you understand the basics of a deadline sale, let’s take a deeper look at the potential benefits of selling your property this way. There are several reasons why you might choose to sell via a deadline sale, these include:
Selling your property quickly
As there is a shorter period of time the property is being marketed for it can reduce the time to sell significantly. Typically the property is marketed for about a month which creates a sense of urgency with buyers knowing they have a limited amount of time to get their offers in or they’ll miss out.
Having no advertised price can sometimes lead to great offers
The absence of an advertised listing price leaves it up to the buyer to decide what they believe the house is worth. That combined with the sense of urgency that if they don’t lead with their best offer in the allotted timeframe they may miss out, can lead buyers to put forward some truly great offers to ensure their best chances of securing the property.
The downsides of selling a house via a deadline sale
While a deadline sale can have the benefits of selling your property quickly and creating the potential for some great offers, it’s important to consider the reasons why this method of selling may not be for you. Some things to consider include:
Having no advertised list price can make some buyers hesitant
For some buyers, having no advertised list price on a property can cause them to be nervous about making an offer that is much higher or much lower than you are expecting. This type of nervous buyer may choose not to put in an offer at all with a deadline sale.
Choosing an offer to accept can be trickier
With a deadline sale, you may receive a wide variety of offers that fluctuate not only in price but also in included conditions. This is when you’ll need to consider all factors and decide which considerations are a higher priority for you (i.e. price, settlement dates, conditional clauses). However, it’s important to remember you can always go back and negotiate with a buyer about their offer before you choose to accept or decline it.
How does a deadline sale work?
Now that you understand the basics of a deadline sale, including the benefits and potential downsides, here is an overview of how exactly the process works:
- The property is advertised with a deadline date (typically the property is advertised for around a month before the closing date).
- Buyers view the property and submit their offers before the deadline.
- The seller can consider and accept any of the offers as they come through or can wait until the deadline date to review all of the offers made.
- On the deadline date, the seller chooses which offer they will be accepting (or they can choose not to accept any at all).
- If an offer is accepted, then the sale of the property goes ahead in line with the conditions set out in the sale and purchase agreement (i.e. when conditional clauses need to be met if there are any, the deposit amount required, when the settlement date will be).
We hope that has answered any questions you have about deadline sales and how they work. However, if you’re still unsure about the process, don’t hesitate to reach out to a member of our team — we’re more than happy to answer any questions.
The team at McDonald Real Estate have been selling houses in Taranaki for over a century and has experience in all types of transactions. If you want a stress-free experience, support with sales terminology, or local expertise, we can help. For tailored advice on your property, book a free appraisal today.
