To Price or Not to Price to Sell Your Own Home – Let’s Go Fishing.

To Price or Not to Price to Sell Your Own Home - Let’s Go Fishing.

To Price or Not to Price to Sell Your Own Home – Let’s Go Fishing.

Honestly, I could write a book on this subject alone.

But, in today’s “Give it to me now – and quick” environment I’ll do my best to cut to the chase.

The schools of thought around pricing a property for sale are as varied as they are numerous.

So, I’ll offer you a measured perspective from my 16 years of front-line property marketing and sales experience.

Generally, sellers’ (and their agent’s) perceptions about what price strategy to employ to attract buyers depends on the type of market that prevails at the time of offering a property for sale.

In simple terms there are three types of market:

  • Hot (Sellers hold the aces)
  • Even (Sellers and Buyers both hold good hands)
  • Cool/Soft (Buyers have the trump card)

The market has cooled, but is not cold or overly soft.

When the market hots up (buyers are plentiful and willing to compete), as it has been 2014-early 2018, many sellers, aided and abetted by agents who only know this type of market, go with a ‘no price’ campaign or auction – especially in the bigger Sydney and Melbourne markets.

Buyers, whose confidence is high, are willing to accept this type of pricing strategy and will research a little deeper to determine value and even be willing to go above their findings and sentiments on price to secure a property.

Heading to the other end of the scale – a Cool/Soft market (buyers are less in numbers and less confident) – some sellers/agents will hold onto the ‘no price’ type of campaign strategy, but the buyers who are still in the market are seeking bargains and immediately want to see the price expectation of the seller with a clear price or at least a price range.

In other words, buyer want something to aim at!

The cooler market sees sellers competing with other sellers (more stock to choose from), and the hotter market sees buyers competing with other buyers (less stock).

What about an even market?

I left this until last, as this is what we are operating in, in a general sense, today (Mid 2018).

The market has cooled, but is not cold or overly soft.

Buyers are still sniffing about, however, they have drawn a line in the sand and won’t chase prices or compete blindly against other buyers and risk paying ‘overs’ for the property they are keen on.

Pricing a property is no different to fishing.

Sellers are slowly realising that the premium price they expected may not be there right now, but a fair price is very achievable.

Do private house sales, or those employing a traditional agent, employ a covert pricing strategy (no price, POA…) or give buyers an indication of their expectations with a transparent strategy (list price, range…)?

Here’s a little bit of property psychology 101.

Pricing a property is no different to fishing.

You stick a healthy (but dead) prawn (bait) on the end of the line and drop it in, optimistically hoping that the biggest fattest fish in the water will quickly latch on, swallow the prawn and your hook – then you reel him in to your great delight.

Your pricing strategy is the bait and the hook.

At the moment I am seeing quite a few sellers dropping the hook in with nothing on it.

The fish in the water are the market – the people you want to attract to buy your property or home.

  • Do you remove the bait and just drop the hook in hoping the less savvy fish bite it anyway?
  • Do you put the prawn on and wait it out until time rolls on and you realise the fish keep swimming past it?
  • Do you put something more appetising and juicy on the hook to really attract the fish and get some serious bites?

At the moment I am seeing quite a few sellers dropping the hook in with nothing on it.

They get a few nibbles, but the fish (buyers) keep asking, “Where’s the bait?”  They are a little interested but not enough to take a big bite.

When there are less fish, and they are more fussy, I strongly advise today’s fishermen/women (sellers) to get fat and juicy early.

Get some delicious bait on that hook and be prepared to change it if no-one is biting.

Buyers’ sentiment can change quickly.

You must adapt to those changes and be prepared to adjust your expectations and strategy to ensure you snare the biggest fish.

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