Many real estate consumers in Australia and New Zealand are experiencing a fall off in the sale prices of their homes. At times like this it is even more important to price property keenly to sell, as ‘waiting for a better price’ often has the opposite result.
It is even more important at times like this for vendors to understand market forces and do their homework on previous selling prices. It is not the time for home sellers to choose as their selling agent the real estate agent who appraises the property at the highest price. It is the time to do sound research on current and projected property values before deciding on an asking price. Vendors who are prepared to be realistic when comparing their property with others that are similar usually sell for the best price in the long run. While no vendor is likely to compare a three bedroom townhouse with a five bedroom family home on a large block, it is surprising how often vendors think of, for example, a three bedroom house with a small sewing room or study as a four bedroom home, even though the floor area of the four bedroom that sold round the corner is greater.
In order to be a more informed client when it comes to strategies for the pricing of their property, vendors should ask their agent what is the average percentage difference between the selling and asking prices of comparable properties sold in the area. It is important to choose a professional agent who bases their opinion of market value on researched facts.
While it is true that not all agents will offer researched facts, it is equally true that not all vendors want to hear the realistic price range their property will fall into. Many vendors prefer to see agents enter into a competition that forces them to ‘buy’ a listing – secure their property for sale by being prepared to put the highest price on it, regardless of what the property is really likely to achieve, based on researched facts.
Vendors who choose an agent who has ‘bought’ a listing will find that their property takes longer to sell and that they will be subject to pressure to reduce the price over time – and in a falling market they might have to reduce it further than they would have if they’d sold it earlier. After all, while vendors may be able to force an agent to ‘buy’ a listing, no one – agent or vendor – can force a buyer to buy a house at an arbitrarily inflated price when there are other cheaper homes with similar appeal just around the corner.