This is the perennial question asked by a property owner who has placed their property to the market and there it sits, languishing! This situation is more prevalent in a market which is either stagnant or where there is downward pressure on property prices. There is a truism in real estate that there are only two reasons that a property has not sold, and that is PRICE or PROMOTION!
It is an owner’s prerogative to set the price they would like to achieve but it is always the buyer who determines the value. There is an asking price and a selling price, and depending on the experience and negotiation skills of the agent, a mutually acceptable figure will be arrived at, that is of benefit to both buyer and seller.
A common mistake made by sellers is that they will list their property above market value to give themselves “wriggle room” and will then negotiate down. Unfortunately, in a static market this strategy backfires as the buying market don’t see the figure as being realistic to market and gives the buyers every reason to either not inspect the property or use it as a reason to buy another property reflecting better market value. A more successful strategy is to position the price of the property closer to perceived market value thereby attracting greater interest and hopefully, buyer competition resulting in a better contract price.
HAVE I CHOSEN THE CORRECT METHOD OF SALE?
If the buyer inquiry has been limited, perhaps it is time to review the method of sale you have chosen. Please remember that buyers have a huge amount of online data they can peruse to determine whether your property is realistically priced. The days of the “bunny” buyer from down south is well and truly gone. Discuss the various methods of sale with your agent and ask them for a solution.
Some sales agents will not conduct auctions as they do not understand the methodology. The process involves additional work to a standard private treaty sale as a greater amount of communication is required with both buyers and sellers. Ask the agents you are interviewing what method of sale they would recommend, and why? The great benefit of an auction campaign is that the buyers inspect your property with no pre-conceived idea on price. This method of sale ensure that an owner does not undersell their property, and by placing buyers into competition a greater than expected sale price can be achieved. This process is normally completed within a four week time frame and gives greater certainty to a seller. Would this method of sale suit your needs?
The Private Treaty sales process is normally the campaign where properties can quickly go stale if they are overpriced. The market then watches the advertised price trickle downwards until it finally reaches a level where it is perceived to be at market value. By then buyers are of the view that the sellers would be sick and tired of inspections, open homes, and continually tidying the house. The buyer will then test the seller with a ‘low ball’ offer.
Do you know anyone that has suffered this experience?
The common denominator for sellers is that if you have had ten or more ready buyers inspect your property and you have not received an offer in writing, then you are overpriced. Sit down with your agent and objectively review the sales process to date. Questions such as:
1. How many buyers have inspected the property?
2. Analyse the data from Realestate.com (How many views, number of saves, actual inquiries)
3. Are the statistics above the median or below compared to other properties?
4. If the number of saves is high, then that is an indication the buyer disagrees with the asking price and wants to be notified when the price is adjusted.
5. What has the buyer feedback been?
6. Have any of the inspecting parties gone on and bought another property?
7. Is there a price where one of the buyers would sign a contract of offer?
Marketing is vital to promote the property to the buyers actively in the market. The ideal marketing should include some of the following:
- Professional photography and if a property is vacant, digital furniture will enhance its profile.
- Professional signboard and if practical, a pictorial board showing images of the interior, gardens, and positive features of the property.
- A strong internet listing that gives a bigger ad and generous text.
- Digital re-targeting marketing that displays the property to buyers who have inquired about the subject property or properties of similar style.
- A strong data base that includes both current landlords and tenants as the seller will never know where the best buyer will come from.
- Newspaper advertising should be considered as not all buyers rely solely on the internet, and newspaper advertising drives greater numbers to the digital listing.
The correct presentation of the property will always enhance both buyer inquiry, inspections and subsequently, offers on contract. A seller needs to have an objective look at the property as a prospective buyer would.
SHOULD I SUPPLY A PEST & BUILDING INSPECTION PRIOR TO GOING TO THE MARKET?
The outlay for these reports, depending on the size of the property, is around $600. Far better to have identified potential maintenance and structural issues, without the loss of time and frustration when the contract is rescinded by the buyer. Buyers approach contract negotiation with more confidence if there are no surprise issues waiting for them.
The agent a vendor employs to sell their property must be able to have honest and open dialogue with both the vendor and buyers. The agent must have the ability to have the difficult conversations with the seller if the market does not agree with the asking price and offer solutions to the vendor. This is vital information for a vendor.
Be objective and ask yourself, WHY hasn’t my property sold? The answer will be in the data before you!
Remember, you cannot sell an expensive secret!
Mark Carmady - Licensed Real Estate Agent