Over pricing a property is the surest way to impede or delay its sale. If you’re having your home appraised, it pays, literally, to ask the Rep during his or her presentation to tell you how they arrived at their appraisal figure. Your Rep should be able to give you evidence of recent (more than 6 months old is out of date) directly comparable sales evidence as well as details of other comparable listed properties to demonstrate that the price they’ve given you is both realistic and achievable.
Similarly, if you’re buying a property, the Sales Rep should be able to cite examples of recent comparable sales and listings that support the price being asked. All REIWA Members have access to historic sales and current listing data for any suburb or street in WA – this is typically compiled in the form of a report called a Comparative Market Analysis (CMA). Sellers should be careful of Reps who try to “buy” listings by giving an over inflated appraisal price. Whilst it’s tempting to want to list with the Rep who has given you the highest figure, make sure you’ve done your own research first as to what has sold recently and what else is on the market so that you have your own idea of what you think your property is realistically worth.
Listen to what the appraising agents say about your property too – how much do they really know about the area and other properties for sale? Are they familiar with the zoning, amenities, features, benefits or even potential drawbacks (if any) in selling your home? When it comes to pricing and selling property, industry wisdom is that:
• Your property is at its highest potential price when it’s first listed.
• The first offer made on a property is almost always the best offer.
• In a buyers’ market, it’s not what has sold, but what else is on the market, that’s the most important determinant of price – active buyers will compare the perceived value of your property to others listed in the area – if they think they can get better value elsewhere they will overlook yours.
• Buyers are increasingly price savvy – realestate.com.au report that the typical buying cycle is 6 to 9 months – that means that buyers begin watching and researching what’s on the market well before they decide to buy.
• The first four weeks of your marketing campaign are the most critical – listing too high and then waiting too long to adjust the price will damage your chances of negotiating the best possible price and conditions. One of the first questions most buyers ask these days is “How long has the property been on the market?” The longer it’s been, the more likely they are to interpret this as the price being too high or the property being unattractive for some other reason.
• REIWA statistics show that the average % discount to the original listing price increases the longer a property takes to sell.
Properties left on the market too long at too high a price are what we refer to as “stale” listings. If you’re a seller and not prepared to adjust your price to meet the market, consider withdrawing the property for sale altogether for a period or at least take it off the internet and remove the sign and try selling it quietly with your Sales Rep instead. If you’re a buyer, a property that has been on the market for many months may present a great buying opportunity – if you don’t ask, you don’t get!
Remember that once you have sold you’re in a stronger position to negotiate a better deal when you buy – if you expect a seller whose home you want to buy to be realistic and meet the market with their selling price, then realise that others will expect the same from you.
About the Author:
For some people there comes a time in life when they are able to combine their talents and passions and call it ‘work’ – Natalie Hoye is one of these people. Natalie is a real estate agent based in Mt Lawley, Western Australia. You can call Natalie on 0405 812 273 or send us an email via our contact form if you would like to speak with her.