Pricing Above the Market – An excerpt from“Real Estates Greatest Dangers”
Before the Internet, properties were mainly marketed via newspaper advertisements, flyers and signs. These mediums had a remarkable and often overlooked advantage. The property left no easily traceable marketing or sales history.
The Internet does. And, it never forgets.
Most properties advertised in Australia appear on one of two major websites, realestate.com.au or domain.com.au. All property information from these two sites is stored in perpetuity, and is easily accessible.
Why should this be a concern for property owners?
Because a property’s history, or digital footprint, is telling. Attempting to beat the market with a high price can devastate a property’s digital footprint.
Has it sold in the past? For how much? Did it get passed in at auction? Why hasn’t it sold? Why have so many people looked at this property and not bought it? Why did it get withdrawn from sale? The answers to these questions increase a buyer’s negotiating position.
As Peter O’Malley (2013) describes in his book Real Estate Uncovered, “All this public information is forming a ‘pseudo credit rating’ for your property”.
Expensive digital marketing campaigns justify their cost on increased views. However, generally, the more people who see a property and don’t buy it, the more the price jobs. Exposure to a property is like sunburn to skin; more exposure equals pain. With property, the pain is often a lower selling price.
Testing the property market at a higher price is no longer feasible without leaving a damaging digital footprint. When the decision to sell is made, the asking price must be close to the market price.
How to discover market price:
Pick an agent you trust. If you don’t trust them, don’t employ them.
When researching property prices, use comparable properties that have recently sold rather that those for sale. The difference between listing price and sale price is often ten percent or even higher.
If in doubt, get an independent valuation. Independent valuers have no agenda. They have nothing to gain by bumping up or reducing a valuation. they provide an honest assessment of a property value.
For a free copy of “Real Estate’s Greatest Dangers” please contact our office.