Selling in Auckland - Part Four: Pricing Your Property

Part Four: Pricing your Property and Method of Sale

So, you’ve got your budget for marketing sorted, you’ve got your home in top shape, and you’ve decided who you want to work with. Now it’s time to sit down with your agent and discuss what price you want to achieve, where your property sits in the market, and how you’re going to sell it.

How do you achieve the best balance? It’s a big question. Too low and you miss out on the best return. Too high and you miss out on the potential buyers. Fortunately, there are a number of ways to lessen this risk. Realistically priced properties generate more enquiries. Which means higher levels of interest, increased competition between buyers and a far greater chance of a better price at sale time. The time spent researching market conditions is invaluable here. It also helps to avoid putting any barriers in the way of potential buyers. One such barrier may be price – as many potential buyers disregard properties based on price alone.

This is where it truly is crucial to listen to your agent. A good agent will listen to what you would like your property to sell for and will honestly tell you if that is achievable. It’s so important to be honest during this step; don’t say one million when secretly you know you won’t sell unless you get three. That’s not the right way to approach this and can often lead to tension and disagreements further down the line. Similarly, listen when your agent tells you where they believe your property to sit within the market. If they say one to one and half, that is what they mean; they’re not secretly thinking you can get two million and just hoping to spare your feelings if it doesn’t work out. That is not how this process works and, again, will lead to tension and disagreements further down the line. A huge part of why you’re using a sales consultant is because of their knowledge of the market. Please listen. If you’re uncomfortable or unhappy, don’t sign the contract.

The two main pricing strategies are:

1. Marketing with a price: This gives buyers the flexibility to make conditional offers. Setting a realistic asking price is crucial, and this will need to be determined in conjunction with your Harcourts Cooper and Co sales consultant.
2. No price marketing: A no-price strategy places a greater emphasis on the property and typically attracts a greater number of potential buyers, offering premium price opportunities and a higher rate of success within a shorter time frame. No price marketing options include Auction, Tender, and By Negotiation.

Selling by auction is the preferred option for many. (It’s my preferred method of selling.) This is because your property is generally on the market for a shorter time, and has the highest sales rate. An intensive, high profile auction marketing programme attracts genuinely interested, cash-in-hand buyers. These buyers are focused on the maximum price they’ll pay, not how low their offer should be. Combined with the excitement of the big day it’s this natural level of competition that helps establish the highest possible price on the day. We’ll assist you in setting the terms, conditions and auction day deadline. Also, the property needs to be only opened for buyer viewing at times that best suit you, so the auction process is regarded as the least disruptive method of selling.

Some of the reasons for selling by auction include:

• Builds urgency and a purchase deadline amongst buyers.
• Creates a competitive transparent purchasing environment.
• Finds a true ‘cash’ buyer with no conditions.
• Provides complete control for seller – you set the terms.
• Option of accepting offers prior to auction.
• Removes risk of under or over pricing.
• Focus is on the property and not the price.

Another option is selling by tender. This method of marketing creates a high profile for your property and establishes a competitive environment without having to list a price. You also set the terms, conditions and deadline. Prospective buyers become emotionally involved before they consider price and have only one opportunity to put forward their most competitive bid.

• You have the opportunity to accept, decline or continue negotiations with any interested party.
• Increased enquiries and inspections are often generated by this sales strategy.
• Tender details remain undisclosed and absolutely confidential.
• Most importantly – you remain in complete control.

Some of the reasons for selling by tender include:

• Tender deadline creates competition and urgency.
• Buyers become emotionally involved before they consider price.
• All Tender details remain undisclosed and absolutely confidential.

The third no price method is sale by negotiation. You can both maximise buyer interest and also ensure a high sale price for your home. The buyer is also focused more on the property and less on the price. This is a great way to gain feedback from the market before settling on a price you’re happy with. Some of the reasons for selling by negotiation include:

• All buyers eligible.
• Focus is on the property, not the price.
• Negotiation advantages.
• Removes risk of under or over-pricing.

If you decide you want to sell with a set price it is extremely important to determine the right figure from the start. Market facts are used to properly gauge this figure. Over-priced properties take longer to sell and do not attract the optimum number of potential buyers, particularly during the prime selling period. The price will often drop considerably without the competition between these buyers. This is not a method that I recommend happily, as I honestly believe marketing without a set price allows the true market value of a home to be achieved.

Ultimately, however, it is up to you. This is another reason why working with an agent you trust is so important. If you can’t agree at this stage, headaches will abound later on in the process.

As I said earlier, my preferred method of selling is by auction. I believe the benefits far outweigh any potential negatives. Robert Tulp, the auctioneer I use for all my auctions, has a great website (www.theauctionguy.co.nz) with a number of videos of him in action. If you’re interested in having a look at any of them, this is a good place to start.

And that’s that. If you’ve missed any of the previous posts, make sure to have a look back at them. As I’ve been saying all the way through, I hope this was helpful and has given you a clearer picture of selling in Auckland at the moment. Don’t worry, I will be back next week with another topic. If you’re specifically looking in Browns Bay and Torbay, or wanting to keep up with the current market, make sure to subscribe to my twice monthly newsletter: Just Listed and Just Sold.