What Is Price by Negotiation?
If you’re house hunting and come across a property listed as “Price by Negotiation”, you’re not alone in wondering what that actually means. Unlike auctions or deadline sales with clear timeframes and terms, price by negotiation leaves the timeline and pricing open-ended. It’s common across New Zealand—especially outside Auckland—and with the recent cooling of the Auckland market, it’s becoming more common there too.
Here’s how to navigate this flexible but sometimes ambiguous process.
Understanding Price by Negotiation
When a property is marketed as “Price by Negotiation”, it means the seller is inviting offers without setting a fixed asking price. This is different from a deadline sale, where all offers must be submitted by a set date. In a negotiation scenario, offers can be made at any time, and the vendor can consider them as they come in.
However, once the vendor has accepted an offer—whether conditional or unconditional—they can’t consider any new offers unless the current agreement falls over. That means time is of the essence; if you’re keen on a property, waiting too long to act could mean missing out entirely.
The Types of Offers You Can Make
When buying by negotiation, you have two main options: unconditional or conditional offers.
Unconditional Offer
This is the simplest and strongest offer you can make. You’re offering to buy the property as is, with no conditions attached. If the seller accepts, the deal is locked in.
Unconditional offers are more attractive to vendors, especially if they’ve been on the market for a while or want a quick sale. However, they carry risk for the buyer—once accepted, you can’t change your mind. That’s why you should only make an unconditional offer after:
Completing due diligence (LIM, title check, building report)
Securing mortgage approval for the specific property
Having your lawyer check the contract
Conditional Offer
A conditional offer is far more common, especially for first-time or cautious buyers. In this case, you agree to buy the property—but only if certain conditions are met. Common conditions include:
Approval of finance by a specific date
Satisfactory LIM or builder’s report
The sale of your existing home
Valuation or insurance approval
Once all the conditions are met, your lawyer will declare the agreement unconditional, and the deposit—usually 10%—becomes payable. It’s important to note that once your contract goes unconditional, the deal is binding.
The Process of Making an Offer
All offers must be submitted in writing using a legally compliant Sale and Purchase Agreement. Your real estate agent will guide you through this process, including setting the settlement date, deposit, and any conditions you wish to include.
Once submitted, the vendor can:
Accept your offer as is
Reject it outright
Countersign with changes (e.g., price or conditions)
Negotiation can go back and forth several times until both parties agree. If multiple buyers become interested at once, the sale may turn into a multi-offer process, where everyone submits their best offer by a deadline. Even then, the vendor isn’t obliged to accept the highest offer.
How to Prepare for Negotiation
Price by negotiation puts the ball in your court—but that doesn’t mean you should go in blind. Here’s how to get prepared:
Get Pre-Approved
Having a mortgage pre-approval shows the vendor that you’re a serious buyer. It also gives you a firm idea of your budget, so you can negotiate confidently and realistically.
Know the Market
Without a listed price, it can be tricky to figure out what to offer. Do your research by:
Looking at recent comparable sales in the area
Asking the agent for a price indication or buyer enquiry range
Using tools like Homes.co.nz or Trade Me’s property insights
Considering how long the property has been on the market
Engage a Lawyer Early
A Sale and Purchase Agreement is a legally binding document, and small mistakes can be costly. Your lawyer will ensure you understand your obligations, review the title, and help you set appropriate conditions before you submit your offer.
Pros and Cons of Price by Negotiation
Every method of sale has its advantages and challenges. Here’s what to keep in mind when dealing with a price by negotiation property:
Pros
Flexible timeframes for making an offer
Room to negotiate both price and terms
Time to complete due diligence before committing
Less competitive pressure than an auction
Cons
Unclear market value can make it hard to know what to offer
Less urgency may invite delays or hesitation
Potential for disappointment if another offer is accepted while you wait
Don’t be afraid of Price By Negotiation
Buying by negotiation is a common part of the New Zealand property market and can offer a more measured, flexible alternative to auctions. But the process still demands preparation, financial clarity, and legal guidance to ensure you’re protected and positioned for success.
Remember, the less conditions you include and the more preparation you do up front, the more attractive your offer will be to the seller. In a market that moves quickly, being prepared gives you a major advantage.
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