Vendors who are too inflexible on price could find themselves being left behind, the head of Auckland's biggest real estate agency has warned.
Peter Thompson, managing director of Barfoot and Thompson, told OneRoof that those considering listing their property for sale by price by negotiation had to think carefully about the value of their property in current market conditions.
He said that vendors who opted for price by negotiation tended to have fixed idea of what their property was worth and "were determined to get that figure".
"My advice to those vendors is to try that figure for the first three weeks of a campaign but if there is not much interest at that stage, reconsider the price. The longer a property stays on the market, the more likely people will wonder, even subconsciously, what is wrong with the property. Remember, the value of a property is what you are prepared to sell that property for and what someone is prepared to pay for it."
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Last week, market analysis by QV found that the drop in buyer activity in Auckland over winter had forced sellers to adjust their price expectations and negotiate in order to get a sale.
QV said that the number of properties coming to market as price by negotiation has risen in the 12 months to August this year, while REINZ figures showed that auctions in Auckland slipped from 24 percent in July 2017 to 21 percent in July this year.
Mr Thompson said that although there had been an increase in vendors opting for price by negotiation, auctions were still the preferred method. "About 40 to 45 percent of our current new listings are listed by way of auction/tender - compared to about 70 to 75 percent 24 months ago when the market was at its peak," he said.
"An auction creates some urgency for a buyer to make a decision and also indicates to the vendor the price people believe their property to be worth. These properties may not necessarily sell under the hammer as many banks now are not issuing pre-approved loans but as soon as an auction passes in (if not sold under the hammer), there is often interest from conditional buyers.
"The auction period time has created that time people have had to make a decision if they are interested in that property. Also, a successful auction program with the property selling under the hammer gives the vendor confidence that they can proceed to buy another property without the concerns of waiting on a conditional agreement being fulfilled."
Mr Thompson said that regardless of sales method used, well-presented properties would always have an edge and he urged vendors to do their best on that front.
"As the market heads into spring, many new listings are coming on stream and giving buyers greater choice, but well-presented properties always make the job of a sale so much easier. De-cluttering your property, and giving it a new coat of paint will improve its chances.
"Demand for well presented properties has seen an increase in sales this year compared to same period of last year, and as the market confidence comes back to normality, we are expecting an increase in activity."
