Does a price tag on an expensive house make it easier to sell? Or are vendors selling themselves short by showing their hand early?
Agents who are in the business of selling trophy homes for $10 million and more seem to be split on the issue of guide prices.
In Australia, it’s unusual to find price indications on prestige listings, but in New Zealand, the rule is you don’t talk price with potential buyers until they’re committed.
Terry King, who sells in the wealthy Auckland suburb of Remuera, has long bucked conventional thinking on price, telling OneRoof that talking money upfront is the “only way to sell real estate”.
Start your property search
Read more:
- 'Nobody with less than $15m got to look at it': Stone mansion on rich-lister street sells
- $8m mansion deal done 'well into the night in jeans and jandals'
- Nanna and poppa selling NZ’s world-famous container home
“Price has not been an issue because it’s already there. Even in the middle or lower price points, it’s the same. You know the price, you can walk in and buy it today,” he said.
King’s latest high-end listing is a mansion at 532 Remuera Road, which he has priced at $32m. He already has two interested parties looking at the property, and is confident it will break price records.
King said there were three key reasons why his agency, Remuera Register, listed homes with fixed price.
Agent Terry King and his wife/colleague Diana. Both are fans of price tags. Photo / Fiona Goodall
“First, isolating the buyers who could afford the property. It’s unusual for someone who doesn’t have the money to ring up, but I would still ask ‘does your budget cover it?’,” he told OneRoof.
“Second, the price is the key reason agents and vendors fall out about because they’ve not agreed to it at the beginning.
“And third, the price is real because we’ve got a registered valuation. It’s a scientific way of doing it.
“Buyers at this level don’t want the publicity, they don’t want people to see them. When they find something they like, they want to buy it.”
Ray White Epsom agent Ross Hawkins agrees. “If it’s not an auction, then you need to have a price indication on it,” he said.
“This is now becoming more common and is a breath of fresh air for the market to know just where they need to be.”
Hawkins said that he was more likely to get calls from interested buyers once they knew what the price expectations were.
Ray White agent Ross Hawkins: “If it’s not an auction, then you need to have a price indication on it.” Photo / Fiona Goodall
Hawkins' listing at 340H Pahoia Road, Whakamarama, in Western Bay Of Plenty, has an asking price of $20m. Photo / Supplied
“It’s more important than ever to give a guide on price in this market due to higher stock levels and lower buyer numbers,” he said, adding that for buyers who were shopping around and comparing value propositions, a competitive price guide gave a property the edge. “There are so many listings with no price indication, no one knows where they stand.”
He added: “CVs are more irrelevant than ever. They are all over the place and are purely a desktop exercise. They don’t compare apples with apples and they don’t take recent renovations or views or any X factor qualities into consideration.”
Hawkins has a range of listings that have been priced.
At the top end and priced at $20m, is a five-bedroom luxury home designed by architects Warren & Mahoney. The property at 340H Pahoia Road, in Whakamarama, sits on nearly 5.7 hectares of headland and includes a waterfront boathouse, swimming pool, tennis court, putting green, landscaped gardens and a sculpture court.
At the other end of the scale, he has a two-bedroom home at 3/6 Prebble Place, in Auckland's Mission Bay, which has a price tag of $1.095m.
He is particularly keen for buyers to understand the value of new-build apartments and townhouses.
The penthouse suite of 119 St Stephens Avenue, in Parnell, is seeking $4.95m. Photo / Supplied
“A brand-new apartment like the Edition, in Parnell, would likely cost more to build now than the asking price. The main structure was built before all the construction price rises, you could not deliver this product now for any new builds at anywhere near this price,” he said.
Similarly, putting an asking price of $4.95m on the penthouse floor of 119 St Stephens Avenue, in Parnell, on the market for the first time in 35 years, showed the value of an established property.
New Zealand Sotheby’s International Realty agent Lisa Hopewell, who deals with high-end properties on Waiheke Island, said price indications weren’t common in her patch.
She has just put a $9.5m price tag on a six-bedroom luxury estate at 345 Gordons Road, at the direction of her vendor. “She’s only there for a small amount of the year, so she wanted to provide a really clear price, and price it very competitively,” Hopewell said.
“It’s under ten million, it’s on the waterfront and you get a huge volume of house for the money."
Hopewell said that even when there is no stated price on her listings, she is very clear with potential buyers as to what they should expect to pay. She said that unless buyers were familiar with Waiheke prices, they could be “all over the place” figuring out value.
The owner of 345 Gordons Road, in Waiheke Island, wants $9.5m for her luxury estate. Photo / Supplied
In the wealthy beach town of Omaha, north of Auckland, Precision real estate agent Di Balich has changed her pricing strategy in recent months. She now shows to buyers on her database what vendor price expectations are.
Recent listings include a three-bedroom unit at 6/189 Mangatawhiri Road, which is priced at $1.6m, and 58 Mangatawhiri Road, which is seeking offers over $2.9m.
Not all her vendors are prepared to disclose their number, Balich said, but most now understood that buyers were shopping by price point.
“Buyers expect there’s a bit of wriggle room in this market. It’s a market where they are testing everything.”
She added: “These are sophisticated buyers. Their financial affairs are consolidated so they know what they can and can’t do. They take [the price] as a guide and then do their own analysis.”
She said that a couple of sales she’s made in recent weeks, one for over $5m and another for $2.5m, sold less than the advertised prices and showed that buyers were negotiating really hard for properties.
One agent who isn’t budging on price is Gary Wallace, of Bayleys Remuera. He isn’t a fan of giving price indications on listings. “We tend to qualify the buyers. They look at the CV to get a guide as to whether it’s relevant, and then they pick up the phone to have a conversation. You really want them to have a meaningful conversation,” he said.
Bayleys Remuera agent Gary Wallace: "Our job is to bring the purchaser and vendor together, not to push them apart." Photo / Fiona Goodall
“Time is money, you don’t want to waste their time. CVs can be helpful, but if it’s too high, buyers see that and it flicks the light switch off. If it’s too low, then before an appointment to view you really need to drill down to get where they’re at.”
Wallace said that if buyers were interested in a property, then conversations around price would develop.
“The focus is on ‘do I love the house?’ If it’s ‘yip, we love it’, then they say ‘can we afford it?’.”
Wallace said there was plenty of buyer interest in prestige houses in his patch, noting that he had done a number of deals for between $8m and $9m.
“If it ticks all the boxes, people engage with you first and take price out of the equation. Our job is to bring the purchaser and vendor together, not to push them apart. If we talk in the right ballpark, then it’s game on.”
- Click here to find more properties for sale
