Putting a price on your home is hard. Sometimes it’s easier to have a marketing campaign that doesn’t involve a listed price, says Daniel Coulson, national residential manager at Bayleys.
That could be a tender, deadline sale, auction, or price by negotiation. That way buyers are viewing your house in terms of its credentials, not simply price.
No price marketing campaigns
One of the issues with putting a price on a property for sale, says Coulson is that you’re sticking your neck out. If the buyers think you’re way off the market you may have lost them.
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In fact you’ll never know if someone who could be a serious buyer never came forward thinking you’d priced the property too high, he adds.
What if a price is necessary?
Sometimes advertising a price is necessary. Perhaps the property hasn’t sold and it’s time to list with a price.
Before setting the price it’s a really good idea to check out property prices on OneRoof. Look at the houses for sale in your area. Compare those homes critically with yours, and get out to as many Open Homes as possible.
READ MORE: CHECK OUT THE VALUE OF YOUR HOME HERE
It’s also worth looking at the council rating valuations for a property value estimate. Beware, however, of basing your price on the CV. Property values may have risen since the latest valuation was done. What’s more the CV doesn’t always reflect a house’s true market value.
Many vendors trust the expertise of their real estate agent, who knows what every home in the area has sold for and how yours compares. .Listening to that advice is important. Price too high and you don’t get a buyer and price too low and you miss out getting market value.
If it’s a rental property Coulson will compare the yields (return on investment expressed as a percentage) in the same market.
Beware of scaring off buyers by asking your agent to put too high a price on the property. Sellers sometimes want to do this to give themselves negotiation room, says Coulson. “It’s best to price sharper and negotiate harder,” he says.
Sellers can of course have a valuation prepared by a registered valuer. There is no guarantee, however, you will get that price although buyers are sometimes encouraged to offer more if a registered valuation is available.
What else is on the market?
Historical sales do provide a reference point for agents. They also look very careful at current buyer activity in the market, when pricing a home, says Coulson.
Just because your neighbour’s house sold for $x two months ago doesn’t mean yours will. Property values are fickle. Timing is a big factor and a few months can make a huge difference.
Your neighbour’s house might have been bought by one person who had more to spend than others at that time. Or there may have been more buyers competing at the same price point.
Finally, understanding the psychology real estate sales is important in pricing a property. “Real estate is more arts than science because it is what one person on any given day is willing to pay,” says Coulson.
