Priced pitch perfect
There have been many exceptional sales in 2023, demonstrating there is still excellent buyer demand in the market.
Year to date, some sales have outperformed the market conditions, some have been at market price – whilst other results have underperformed. Aside from Presentation and Process of Sale, Price is the third major variable that determines the ultimate success of a campaign.
Once a vendor has settled on the right process of sale for their property, pricing accurately relative to the market conditions of the day will do more to ensure a successful sale than any other element of the campaign.
There is an old advertising maxim – good advertising kills a bad product faster. As it applies to real estate, if a property seller overspends on advertising their property to more buyers at the wrong price point, the damage will be done more quickly. Once this happens, it can be very difficult to recover because the best buyers in the market have rejected the property.
If you start too low, you will attract too many buyers, but potentially devalue the property in buyers’ minds. If you start too high, buyers may well bypass your home in favour of others that seem more reasonably priced.
Setting a reasonable market-based Price Guide based on recent comparable sales will do far more to attract fair-minded buyers than any advertisement or brochure will.
To ensure you price accurately, identify 3 comparable listings on the market and 3 (very recent) comparable sales. Best to not outsource this task to the agent. Form your view on the price of your property and then cross reference that with your agent’s perspective.
If buyer competition builds for your property at the market price, you may well be one of the fortunate sellers who achieve above the market price.
In the boom markets of recent years, the market rose as one. As market conditions became more unpredictable due to escalating mortgage rates, the market is no longer performing in unison. To transact prudently, remember there are markets within markets. Agents and vendors need to be granular in their market research.
High-end house prices seem immune to interest rates at present. One could easily argue the strength at the upper end of the market in what is a low turnover environment, is distorting the overall data. The strength at the upper end may be suggesting house prices in the broader market are stronger than they are.
Luxury apartments with views that appeal to baby boomers are performing far better than generic high-rise apartments on busy roads and/or in suburbia. Any commentary on “Apartment Prices” is too broad-based on which to make critical decisions. For example, Suburban High-Rise Apartments are assessed as being in the same category as say Prestige Harbour-front Apartments. The relative performance of these respective market segments could not be more different at present.
Regardless of what you are selling, the best way to attract the market is to quote the market price. Genuine buyers will enquire, inspect, and bid on fairly priced properties.
If you are selling, a careful and critical assessment of how the market is performing in your category will ensure you price correctly and ultimately sell for more. The best sales results come after a competitive bidding process.
By Peter O’Malley, author of Inside Real Estate
