Listing price strategy

[Thrawn]

I've got a PPOR that I'm just about to put on the market.

Market in the area right now is starting to get stagnant after a hot run. A fair few new listings with only a few selling.

I've had a 3 agents to come in and do appraisals, they are all appraising at $650k to low $700's mark. My personal feel based on other listings is probably low to mid $600's.

I'm about to sign the agency contract with one of the agents and she's suggesting a listing price of $729k. It seems a bit crazy to me (though I didn't really let her know this ...). Should I just follow what she's saying as her instinct is probably better (lives in the area and been selling for years), or should I "overrule" her and set a more realistic price.

I am absolutely prepared to drop the listing price by $50k if need be in the first week, would this scare off buyers ? Or does this have the potential of attracting attention ?

In the end, if it doesn't reach the price I have in mind, it's not a big concern.. i'll just have it rented out if it doesn't sell after a month.

 

[boomtown]

I bet you a dollar shes talking up the listing price just to get your business and then as soon as you sign the agency contract she starts talking it down and talks you into relisting at a lower price.

 

[josko]

It would depend on how quickly you want to sell it.

Don't forget, once it goes on the net it comes up as "new" and will prob be in the first couple of pages. The longer it is on there the more it will go down the list.

It's tough to tell if they haven't got any comparable sales. At least if you have it at the higher price, your agent will get a "feel" for the market and potential buyers will tell her if they think it is way too high.

Why are yu selling if it doesn't bother you to rent it out?

regards Jo

 

[Thrawn]

Boomtown, thats a good bet.

Its not like there's much difference between the agents, they all pretty much wants to do the same thing... So.. either:

1. They're all overquoting and then coming back after the first open to get me to drop the price by $50k (which I'm okay with really, as long as it didn't jeopardize me getting the best possible price).

2. Or perhaps I was the one that was wrong about the prices and they're the ones that are right (there are 3 different agencies saying the same thing). I did spend a fair bit in renovations, maybe I'm just too involved and can't see the value add for myself.

How common is overquoting ? Is 3 out 3 all that surprising ?

 

[Thrawn]

Why are yu selling if it doesn't bother you to rent it out?

Part of it is emotional, I spent a fair bit of cash and weekends getting it up to the state it is now.. Can't bear the thought of renters denting it.. almost feels like its worth just leaving it empty

And part of it cause I reckon the market is going to be stagnant/down. Don't need a house right now as I'm most likely gonna move interstate soon anyway.

 

[Lukey13]

Hi Thrawn

Just wondering whether you wanted to shed some light on your motives for selling your PPOR at this (flat) stage of the market?

I'm only curious because I myself am considering selling mine for the purposes of upsizing (for family reasons) and whilst I don't like the idea of selling for less than what I might have got just several months back, I do believe there to be the upside of getting a bigger "discount" on the price of the new PPOR, which afterall will be higher in value (and thus discount) than the current PPOR...

 

[boomtown]

Overquoting just means it will take longer to sell imho. In this market anyway.

 

[Thrawn]

Hi Thrawn
Just wondering whether you wanted to shed some light on your motives for selling your PPOR at this (flat) stage of the market?

I calculated you need a CG of around 4% to break even (after negative gearing). If the market is really flat, then one year of flat market will cost me the same as the exit/reentry costs of getting back on the market later down the track.

In my opinion, there's more chance of the market going down than up at this point.

Then again.. considering I'm at the same postcode as this beauty, maybe its worth holding on

http://www.realestate.com.au/cgi-bi...c=&c=96851278&s=qld&snf=ras-bri&tm=1212394609

 

[boomtown]

Dont be a dodo just keep it.

 

[travelbug]

If a property is overpriced then drops and drops people sometimes ask "what's wrong with it that it's not selling/been n the market so long". Best to try to set a realistic price.
In an area I have been researching there's one PM that has properties that are always overpriced (my opinion). They seem to be on the market for a while then drop. Other agents properties are snapped up in a week.

I've given up going to their open homes until the price drops.

 

[eKwatee]

I've got a PPOR that I'm just about to put on the market.

Market in the area right now is starting to get stagnant after a hot run. A fair few new listings with only a few selling.

I've had a 3 agents to come in and do appraisals, they are all appraising at $650k to low $700's mark. My personal feel based on other listings is probably low to mid $600's.

I'm about to sign the agency contract with one of the agents and she's suggesting a listing price of $729k. It seems a bit crazy to me (though I didn't really let her know this ...). Should I just follow what she's saying as her instinct is probably better (lives in the area and been selling for years), or should I "overrule" her and set a more realistic price.

I am absolutely prepared to drop the listing price by $50k if need be in the first week, would this scare off buyers ? Or does this have the potential of attracting attention ?

In the end, if it doesn't reach the price I have in mind, it's not a big concern.. I'll just have it rented out if it doesn't sell after a month.

This is how I price my Vendor's homes for sale to achieve the best price the market can achieve, but at the same time protecting the price.

I,ll explain.

eg. If you believe you should achieve a selling price of around $680,000. I would advertise the property for sale for a price range of $660,000 - $720,000.

I like to set the price range approximately 8% of the lower value but this percentage could change as the market does.

Now why the price guide:

1. The lower end of the price guide protects your pricing from the very beginning of the marketing campaign, as we mentioned earlier because we believe we should achieve around $680,000 in reality you then shouldn't have to ever reduce the price.

2. The top figure of the price range gives a buyer who doesn't want to miss out on your property a figure to shoot for, this because very effective should you have a multiple offer situation because the correct rules for a multiple offer situation is not to run a dutch auction but to inform the buyer they are under a multiple offer situation and must insure they put their absolute best price, terms and conditions, then all offers will be presented to the vendor's and you believe the vendor's would work with the buyer with the best offer and may not come back to you. Now, put your buyers hat on for a minute here. If you knew there was more than yourself interested in the property and believed the value of the property was close to or near the top figure and you didn't want to miss out, wouldn't you (a) think the other interested buyer may offer near the top figure or (b) offer near the top figure as to insure you had the highest offer.

3. Also a correct marketing and releasing strategy for the sale of your home combined with this pricing strategy should create such competition.

4. Now you ask shouldn't a vendor be committed to accept a reasonable offer within the range, no the price range is only an invitation to treat. If you can show to the buyers that properties nearby have sold around each end of the guide, I explain to the buyers that homes in the area have sold between here and here, now you offer what you think this property is worth.

5. Now if you were a buyer why wouldn't you offer at the lower end of the price range. Plenty do, but they wont be your buyer, the buyer who is the perfect buyer for your property would recognize the value and if marketed correctly be in competition as previously mentioned and know they have to go their hardest.

6. Also the price range being positioned this way from where you see the property end selling point allows the Agent to negotiate with every interested party. Me as an agent would prefer to negotiate with a buyer with a low offer, than not negotiate with any buyers because we have no offers.

 

[Dis]

This is how I price my Vendor's homes for sale to achieve the best price the market can achieve, but at the same time protecting the price.

I,ll explain.

eg. If you believe you should achieve a selling price of around $680,000. I would advertise the property for sale for a price range of $660,000 - $720,000.

I like to set the price range approximately 8% of the lower value but this percentage could change as the market does.

Now why the price guide:

1. The lower end of the price guide protects your pricing from the very beginning of the marketing campaign, as we mentioned earlier because we believe we should achieve around $680,000 in reality you then shouldn't have to ever reduce the price.

2. The top figure of the price range gives a buyer who doesn't want to miss out on your property a figure to shoot for, this because very effective should you have a multiple offer situation because the correct rules for a multiple offer situation is not to run a dutch auction but to inform the buyer they are under a multiple offer situation and must insure they put their absolute best price, terms and conditions, then all offers will be presented to the vendor's and you believe the vendor's would work with the buyer with the best offer and may not come back to you. Now, put your buyers hat on for a minute here. If you knew there was more than yourself interested in the property and believed the value of the property was close to or near the top figure and you didn't want to miss out, wouldn't you (a) think the other interested buyer may offer near the top figure or (b) offer near the top figure as to insure you had the highest offer.

3. Also a correct marketing and releasing strategy for the sale of your home combined with this pricing strategy should create such competition.

4. Now you ask shouldn't a vendor be committed to accept a reasonable offer within the range, no the price range is only an invitation to treat. If you can show to the buyers that properties nearby have sold around each end of the guide, I explain to the buyers that homes in the area have sold between here and here, now you offer what you think this property is worth.

5. Now if you were a buyer why wouldn't you offer at the lower end of the price range. Plenty do, but they wont be your buyer, the buyer who is the perfect buyer for your property would recognize the value and if marketed correctly be in competition as previously mentioned and know they have to go their hardest.

6. Also the price range being positioned this way from where you see the property end selling point allows the Agent to negotiate with every interested party. Me as an agent would prefer to negotiate with a buyer with a low offer, than not negotiate with any buyers because we have no offers.

That was very informative. Thankyou.

May I ask, is what you have described your own personal strategy or is it the "done thing" amongst REAs when quoting ESRs

 

[eKwatee]

That was very informative. Thankyou.

May I ask, is what you have described your own personal strategy or is it the "done thing" amongst REAs when quoting ESRs

My own personal strategy. I have a good marketing strategy and releasing strategy to coincide with the pricing strategy. All helps for a successful sale. I really enjoy researching the whole selling process.

 

[Spectre]

Thrawn

If you're really in FTP then I think - from the rumour mill... "the" agent is Cathy Lammie at Remax as she focuses on that area - I've even had other agents complaining about her having the edge... whatever you want to call it. I know some other agents that live in that area so if you want a few more names then PM me.

Otherwise you'll probably find that most agents want a 60-90 day contract, and they may remind you that selling a house in a week is not 'normal' and the market isnt as hot as it was blah blah blah...

Whether it be agency X or Y, each has their own sales 'technique'... but if they are any good then each of them will work for you at the end to get the highest price.

Like the hyperlink as well.
Personally this is more my cup of tea
http://www.realestate.com.au/cgi-bi...r=&cc=&c=96351432&s=qld&snf=rbs&tm=1212416136

 

[evand]

The worse thing you can do is list your property at a too high price. It will most likely lead to you getting a lower price than you want.

A property goes stale after 4- 6 weeks and the buyers looking in your area in your price range will know your property is overpriced and they wont make an offer $50k below listing price. So it will just sit there unsold.

Best result for you will be if you list at 10% above what you want or what you think the market value is (comparable sales, registered valuation etc) and be realistic about the price.

Nearly all agents play a game called 'buying a listing' and 'conditioning'. Which means telling you your house is worth way over the market value to get the listing and then conditioning you down in the contract agreement period.


Don't fall for this, especially if the market is slow up there. Which it probably is.

You dont need a three month agreement either. If your house, doesnt sell in 4-6 weeks it ususally means its way over priced and the market knows it.

And its usually way over priced from the agent doing the old buying a listing and condidtioning routine.

Your house goes stale on the market and the agent convinces you to reduce the price over and over and mostly you end up selling below what you would if you listed it correctly in the first place.

Or the agreemnet time runs out and you end up signing with another agent and the same game starts again. Its a very damaging practice.

 

[BayView]

I am absolutely prepared to drop the listing price by $50k if need be in the first week, would this scare off buyers ? Or does this have the potential of attracting attention ?

In the end, if it doesn't reach the price I have in mind, it's not a big concern.. i'll just have it rented out if it doesn't sell after a month.

If you are prepared to drop $50 k in the first week, then start at that level from day one.

Also, if the local market is slowing down as you say, and you are prepared to rent it out if it doesn't sell, then now may not be a good time to sell if you can hold it with a tenant in it.

 

[HandyAndy888]

Dont be a dodo just keep it.

Good call....