THE ART OF SETTING THE RIGHT PRICE GUIDE

  • August 28, 2018

The anticipation for this year’s Spring market has a little more edge than in previous years. Perhaps it’s due to the weaker selling conditions through Winter which have caught the attention of both buyers and sellers who are wagering on different outcomes from the Spring period. Buyers are wondering if prices will continue to decline while sellers are hoping the warmer weather will reinvigorate the market. We can intensely debate the potential forecast but it really doesn’t matter. We’re more interested in discussing areas we can control and empowering both buyers and sellers. The one rule we believe is critical for sellers this Spring is to ensure they promote their property with the right price guide in order to secure a buyer.

 

 

What is a price guide exactly? This guide is used to commence a campaign and is essentially an invitation to buyers with the appropriate budget to inspect the property and open a conversation with the selling agent. The guide can certainly move throughout the campaign as buyer feedback filters through. Ideally for any seller, increasing the guide is the more attractive outcome, sending a clear message to buyers that competition has been identified above the guide. However, if the guide is too high we tend to see the wrong buyers inspect the property and reducing the guide may be the only way forward to attract and engage genuine buying interest.

 

 

How do I ensure that I set the right price guide? Well, it’s a combination of factors but here is a simple four-step process I recommend you undertake prior to committing to a price guide.

Step 1: Assess the most recent comparable sales of the past several months. Don’t go too far back as we’ve seen the market shift month on month this year and anything beyond six months just isn’t relevant anymore. Make sure you also look at how these properties were sold. Was it at auction, prior to auction, after the auction or by way of private treaty? Be aware of how long the properties took to sell as well as this will provide insight into the likely number of buyers searching within your price range.

Step 2: Review your property’s competition. Go to open houses, listen to what buyers are saying, reassess how the property is presented and speak with the agent to find out what feedback they’re getting.

Step 3: Speak with your agent and discuss how many buyers they have on their books for a property like yours, how active the buyers are and if they’re ready to act today.

Step 4: Review what is happening in the media as this influences how buyers assess market sentiment and how they may be acting.

 

146 Evans Street, Rozelle – Buyers Guide – $1m

 

If you’re not aligned on these four elements you’re placing your sale in jeopardy and the difference in outcome between the right and wrong price guide can be dramatic in this climate. Buyers are searching for value above almost everything else right now and many are willing to look beyond their ideal location to the next suburb or region if they can expand the level of accommodation and quality. Each week we meet buyers who are searching in the East, North and Inner West in an effort to gauge the best bang for their buck. This means every seller needs to be competitive in order to attract buying interest. If you hit the right note with buyers you can expect competition and a sale within a four-week period. Conversely, set the wrong guide and you’ll be stuck on the market with no offers, your campaign will likely extend past 50 days and it may prove a highly stressful experience.

Follow the four steps and no matter what direction the market heads in this Spring, you’ll set yourself up for a successful sale.

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