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Transcript

HOW TO SET THE RIGHT ASKING PRICE FOR YOUR PROPERTY · The Real Estate Show

• 0:00
  Speaker 1: Well, Cam, I'm bringing another real-life scenario to you now.
• 0:03
  Speaker 1: We're going to workshop together and with our next guest.
• 0:06
  Speaker 2: Let's do it.
• 0:07
  Speaker 1: I have a friend of mine who's selling a property,
• 0:09
  Speaker 1: and we've been having chats about what asking price they
• 0:13
  Speaker 1: should set. And so she's been looking at a couple
• 0:16
  Speaker 1: of different strategies and isn't sure what to go with.
• 0:20
  Speaker 2: One is.
• 0:22
  Speaker 1: Setting a lower price to what they want.
• 0:24
  Speaker 2: Right.
• 0:24
  Speaker 1: And saying offers over, you know, whatever that number is. Yeah, yeah, yeah.
• 0:29
  Speaker 1: In the hope that it might generate more interest and
• 0:31
  Speaker 1: potentially create a bit of a bidding war and drive
• 0:33
  Speaker 1: that price up. Okay.
• 0:35
  Speaker 2: Or.
• 0:35
  Speaker 3: Right.
• 0:37
  Speaker 1: Setting a bit of a higher price than what you
• 0:42
  Speaker 1: really want and then accepting a lower offer so the
• 0:46
  Speaker 1: buyer thinks they've struck gold and got a good deal
• 0:48
  Speaker 1: and you're actually happy with it as well.
• 0:50
  Speaker 3: Yeah, so if they give you sort of like not
• 0:52
  Speaker 3: a low ball but a lower offer, they think they're
• 0:55
  Speaker 3: getting a deal and you're getting what you actually really
• 0:57
  Speaker 3: set out to get for in the first place.
• 0:59
  Speaker 2: That's right.
• 0:59
  Speaker 1: And it's something, you know, two very different strategies and
• 1:03
  Speaker 1: something they want to get right from the outset.
• 1:06
  Speaker 2: Yeah.
• 1:06
  Speaker 1: And no doubt this is a scenario that our next
• 1:09
  Speaker 1: guest encounters every day. Steve Lowe, Director at Agent Team Canberra. Steve,
• 1:13
  Speaker 1: good morning.
• 1:15
  Speaker 2: Good morning. Gosh, this sounds like your friend is dodgy.
• 1:18
  Speaker 1: Does it? What would you say to them? Stop being dodgy?
• 1:25
  Speaker 2: No, pricing is one of the most important parts to
• 1:31
  Speaker 2: get right from day one. The most amount of interest
• 1:35
  Speaker 2: when your property goes in the market is within the
• 1:37
  Speaker 2: first 12 days. And if you set the price too high,
• 1:41
  Speaker 2: you've ruined your campaign. So pricing it, not below what
• 1:46
  Speaker 2: you would accept, but at an attractive price. So let's
• 1:50
  Speaker 2: just say if your friend, what sort of money would
• 1:52
  Speaker 2: they like to get for it?
• 1:53
  Speaker 1: Like early sixes, I think she was saying.
• 1:56
  Speaker 2: All right, so if it went on the market today
• 1:58
  Speaker 2: and a buyer came through the door and they had
• 2:01
  Speaker 2: $ 590, 000 in cash, they're ready to sign a contract and
• 2:03
  Speaker 2: give you the keys in 30 days, what would you say?
• 2:08
  Speaker 1: Well, this is where it gets tricky. I don't know.
• 2:11
  Speaker 1: I can tell by the tone of your voice that
• 2:14
  Speaker 1: you're saying she should take it and run and cheer
• 2:16
  Speaker 1: for the mountains.
• 2:18
  Speaker 2: Quite possibly. Yeah. But everybody has their bottom dollar, and
• 2:23
  Speaker 2: that's generally the advertised price as an offers over campaign.
• 2:28
  Speaker 2: You can't price it below what you would actually sell
• 2:31
  Speaker 2: it for because that's just misleading buyers and wasting everybody's time.
• 2:35
  Speaker 2: If you price it too high, you have the other problem,
• 2:38
  Speaker 2: which is you've got no one to negotiate with. You'll
• 2:40
  Speaker 2: have your first open home. You'll have no one come
• 2:42
  Speaker 2: through it or the buyers that do come through it.
• 2:45
  Speaker 2: you know, they're searching for properties in a higher price bracket.
• 2:48
  Speaker 2: And so yours is compared against those other ones and
• 2:50
  Speaker 2: is less appealing. And so it ends up sitting on
• 2:53
  Speaker 2: the market for quite some time. And then you end
• 2:55
  Speaker 2: up having to reduce the price probably more significantly than
• 2:59
  Speaker 2: pricing it accurately from day one.
• 3:00
  Speaker 1: Okay.
• 3:01
  Speaker 3: So like you say, it's a very important thing to
• 3:03
  Speaker 3: get right from the start. But other than asking for
• 3:06
  Speaker 3: too much, what are some of the other mistakes that
• 3:09
  Speaker 3: you see people making when setting the asking price? Hmm.
• 3:15
  Speaker 2: So one of the mistakes is going with the agent
• 3:18
  Speaker 2: that promises the highest price with the lowest commission because
• 3:20
  Speaker 2: that's just the oldest trick in the book to win
• 3:22
  Speaker 2: the business. So it needs to be based on sales
• 3:26
  Speaker 2: evidence and experience. And the next one is using those
• 3:29
  Speaker 2: online estimate tools to work out what you think it's
• 3:32
  Speaker 2: going to sell for. Those things are rubbish and they
• 3:35
  Speaker 2: should be banned. So it really comes down to... understanding
• 3:41
  Speaker 2: the marketplace, looking at your recent sales nearby in the
• 3:45
  Speaker 2: comparable condition and the comparable marketplace, and then working out
• 3:50
  Speaker 2: what sort of money you'd like to set the price at.
• 3:54
  Speaker 2: But buyers really don't care how much you need for
• 3:59
  Speaker 2: a house because you're selling this one to buy something bigger.
• 4:02
  Speaker 2: They don't care about that. It needs to be set
• 4:04
  Speaker 2: super accurately based on those parameters.
• 4:07
  Speaker 1: And Steve, my friend who's in this situation, she was
• 4:10
  Speaker 1: looking online at some of the recent sales of comparable
• 4:13
  Speaker 1: homes in the area. And she was saying that the
• 4:16
  Speaker 1: price was withheld on a bunch of those. So she
• 4:19
  Speaker 1: couldn't tell how much they sold for. Is this a
• 4:22
  Speaker 1: strategy used by agents? So then someone has to reach
• 4:25
  Speaker 1: out to them and then they've got that contact and
• 4:27
  Speaker 1: then they can keep in contact with them? Or what's
• 4:29
  Speaker 1: the go there?
• 4:31
  Speaker 2: Yeah, definitely. So there's two reasons. One sometimes is that
• 4:36
  Speaker 2: the sellers or the buyers actually request the price be withheld.
• 4:40
  Speaker 2: Once it's exchanged, that's sold, the price is withheld. And
• 4:44
  Speaker 2: then once it's settled, about 30-ish days later, that settlement
• 4:49
  Speaker 2: price becomes public data automatically anyway.
• 4:52
  Speaker 3: Gotcha.
• 4:54
  Speaker 2: But during that initial sort of 30 days, a lot
• 4:57
  Speaker 2: of the time the prices would sell because we would
• 5:01
  Speaker 2: like sellers to call and get our expert opinion on
• 5:05
  Speaker 2: what their property is worth rather than them just using,
• 5:08
  Speaker 2: you know, these online tools that are super inaccurate.
• 5:10
  Speaker 1: Yeah, gotcha.
• 5:11
  Speaker 2: Okay.
• 5:12
  Speaker 1: Well, you know, we could talk about this for much longer,
• 5:15
  Speaker 1: but we'll have to leave it there. But that was
• 5:18
  Speaker 1: super interesting. I shall pass on all of your feedback.
• 5:23
  Speaker 2: Good luck.
• 5:24
  Speaker 1: Thank you. Steve Lowe, Director at Agent Team Canberra there.