The different strategies
Generally, we like to have a price range on every property. Some agents use ‘no price’ trickery that alienates buyers and confuses people. Other ‘old-school’ agents will use a fixed price method which in my humble opinion leads to a lower sale price.
We like to view pricing as flexible. If there is strong interest, we will increase the price. If there isn’t it can be lowered. Don’t stress too much about the asking price until you are ready to hit the market. Concentrate on the strategy the agent is going to use.
No Price Selling
Such as Market Preview, Price on Application, Express Sale or Priority Sale:
- The property is advertised with no price
- The theory is that you will get lots more buyers, including ones with a lower budget that may buy ‘up’ once they see how awesome your place is
- Used by rookie agents that either don’t know the price or are too scared to tell you what they really think (it is much easier as an Agent to say ‘let’s get the buyers to tell us what they think it is worth’)
- Buyers generally hate this and will likely avoid the property altogether, meaning less inspections and a lower price. Not always, but we reckon more often than not!
- The favoured option for old-school agents – the cheap suit brigade!
- Often used to ‘buy your listing’ – “Lets start at $1,000,000 and see how it goes!”
- You start with a price that is probably higher than what the market can bear with the idea that buyers will make lower offers and will end somewhere a bit lower than the price you set
- Sounds good in theory but an overpriced property gets less inspections. Less competition means a lower price. It’s negotiating 101
- Usually after a couple of weeks, the agent starts to pressure you to lower the price
- In my opinion, a lazy way to sell
Price Range Selling (i.e. $600,000 – $650,000)
- You get buyers at the lower end to stimulate demand. Often these buyers will buy ‘up’ once they see the property
- The additional competition gives buyers confidence there is a lot of interest in the property and helps secure a better price
- An increasingly popular way to sell where you are protected by your reserve price
- A structured 4-5 week program needing lots of communication between agent and seller
- While buyers are usually scared of auctions, it is a transparent way of selling where all the cards are clearly on display
- The fear of an auction often pushes buyers to make great offers prior to the auction
- Allows you the opportunity to sell before auction or on auction day. If it fails to meet the reserve on auction day, success can be limited
- Takes a lot more agent skill than it seems. A good auctioneer is important, but getting all the buyers there on the day and in a position to bid is critical
- We believe you can secure the best price via an auction, but it doesn’t come without risk
- If there is limited interest, you could struggle to meet the reserve
- $595 cost associated with auction for the Auctioneer (most people wrongly believe that an auction costs several thousand dollars – it doesn’t)
- We love auctions but recognise that they aren’t for everyone. They can add an element of stress which should be a consideration. Don’t expect us to push this on you when we chat