The Art of Price Positioning

How do you price a property for sale to achieve the best result, or do you not market at a price? The no price proponents, eg by auction, say it is best to let the market decide by getting buyers feedback In certain areas of Australia, notably Melbourne and Sydney, auctioning is the dominant form of marketing, not so accepted elsewhere. The press promote auctions aggressively because it is a press dominant process, relying much more on heavy, widespread newspaper advertising $`s in a short time frame rather than the balance of appropriate press and internet exposure designed for the property, ie strategic management which may be local press only. Qld, for instance, despite the apparent dominance in the press of auctioning due to the major agencies championing it, has far more properties sold by private treaty rather than at auction. In areas where there is a lack of wide auction acceptance, market feedback on likely sell prices can be skewed by savvy bargain hunters who give rock bottom price feedback to agents. The “Make an offer” or similar & “Offers over $x” listings are invariably the result of a vendor not liking the probable sale range price advised by the agent on appraising. These approaches are often suggested by agents on the premise they will attract much higher prices than the appraisal, all to win the listing. This is usually wrong on all counts. *Many buyers will simply not enquire as they fear they will be wasting their time, or * Buyers will sense a bargain with this sort of language and hit a low price. Very rarely do offers over list price marketing result in much more than at best ,a small price above the list price, usually lower. Then we have the very high list prices, on the assumption you can always come down, but you can`t go up. Totally unrealistic. The problem here is that buyers know that & do not come, you have nobody to negotiate. The upshot: * an effective auction is significantly more expensive than private treaty with heavy dominance on mass press advertising. *Selling on a no price basis, eg “Make an offer” limits the opportunity to sell at the right price with fewer buyers inspecting ,with bargain price offers a likely outcome * High list prices attract very few buyers The lesson to be learnt is to work with the experienced & highly knowledgeable local area expert to market at the proven price range using their marketing expertise & contact with local buyers if sellers wish to sell in a realistic time frame & at maximum market value. Many don`t - the average house sale result for P/C 4573 for the 12 months to July 2013 is on the market for 168 days with discount off original list price of 9.4% !!! Surely this tells a tale!! Geoff Grover - Property Talk - November 2013