Once you have chosen your agent, the next biggest decision to make revolves around what price to set.
Generally, there are three options:
This is the old fashioned way of buying property. The logic being that you set a price of $749,000, then buyers will offer you $720,000 and you may end up around the $730,000 - $740,000 mark. So, if you want $750,000, just set the price at $769,000.
This was a good strategy until the internet became the gold standard to find homes. Now, buyers will use the search filters to help weed through the hundreds of listings online. One of the most used search criteria’s is the price filter. If I wanted to buy your house in the above example but I only wanted to spend $700,000, I wouldn’t see your place at all. This is a big mistake. Buyers buy up. They almost always spend more than they want once they’ve seen their dream property.
If you set a price of $695,000 - $750,000 then your place will pop up in their search. If they see your property and fall in love, they will find the extra funds. If not, they might make a lower offer which helps create the additional competition need to push another buyer higher.
This is the most commonly used form for advertising price. You will notice that many of our listings are advertised this way.
In the above example, if we advertised your property with a guide of $695,000 - $750,000 you are not under any obligation to sell for $695,000. Even if you get an offer of $800,000 you aren’t committed to selling.
The big advantage of this versus the previous example is your property will come up in someones search if they are looking for homes in your area under $700,000. In our experience buyers often ‘buy up’. That is, once they see your property and fall in love with it, they will often pay way over $700,000. Even if they don’t, you will get more people at your inspection which will help us build pressure on the buyers that do have the right budget. Competition is the key to record prices.
Sellers will routinely say, ‘If I saw the advertised price as $695,000 - $750,000, I wouldn’t pay more than the bottom’. From our experience, these comments don’t fit with reality. These sellers often haven’t been in the market to buy for some time. We can review hundreds of sales and show you that rarely does the price not end up near the top, or often above it.
This is where properties are advertised as ‘expressions of interest’, ‘Market preview’ etc.
This can be a really good approach when a property is tricky to price. Having no price tends to lead to more enquiries. Some of these will be in a lower price bracket. Even if they don’t have the necessary funds, they build numbers at inspections which will make the property appear more popular. As with the price range option above, you can attract buyers who will ‘buy up’.
The advantage of not disclosing a price is you aren’t limiting yourself with a ceiling price. If a buyer thinks the property is worth more than you do, why limit yourself to having a top price bracket? This works really well when we have Sydney buyers in the market. Their perception of price can be very different from a locals
We have had some really good success using ‘Expressions of interest’ campaigns. In this situation, we run a number of inspections over a 2-3 week timeframe with a fixed date at the end for buyers to submit offers. Once this date passes, we will negotiate with the buyers that have made offers. It’s like having an auction without the theatre (or pressure) of the auction day. If it doesn’t sell during this time, you can add a price range and continue on with the selling campaign. Unlike a public auction, no one knows where the bidding stops.
Buyers don’t always love this approach. They would prefer to get a clear indication of your expectations which we think is totally reasonable. Given the shear number of agents who don’t market with a price, they unfortunately have little alternative but to view these properties anyway.
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