Is it any wonder that people don’t trust real estate agents. Especially when they continue to suggest marketing your most valuable asset at a ‘price range’ or ‘offers over’ or some such other nonsense.
Why is that when you buy most things, they have a price attached, but when it comes to property it becomes a guessing game.
Value is in the eye of the beholder and it is true that a sellers greatest fear is ‘underselling’ and for a buyer it is ‘paying too much’.
Price range selling is where a home is not offered at a set price but rather in a range. As an example, if a property has a market value of $450,000, the agent will suggest a range of $425,000 to $475,000.
Do they really think a buyer isn’t going to work out that the seller probably wants something in the middle?
The theory is that the buyer will be attracted by the lower price, fall in love with the property and happily pay the higher price! Nice theory – but is it reality? No!
The buyer will like it because it is $25,000 below value – a bargain – and then the seller will have to rely on the agents negotiation skills to get the buyer up to market value. A big risk.
The reason I dislike price range selling is it is implicit that the seller will seriously consider the lower figure when in reality it is the sellers greatest fear.
The problem remains that the seller wants the higher price and the buyer wants the lower price. So why do agents suggest this method?
One reason can be to create activity, which gives the appearance the agent is doing a great job but the offers will be too low.
Another reason is that after hearing these low figures for a while, the seller starts to believe that perhaps this is really what the property is worth because that is ‘what the market is saying’.
A golden rule when selling anything – never ask for less than you want to receive! It might just happen.
Kevin Turner | RealEstateTalk Host
Property Academy CEO Sell your home quickly without an agent
[email protected] | Twitter: @RealestatetalkHi nice post
I used to work in real estate and I did very well to. To be honest every area and market conditins require an agent to sell the home differently. The way I value homes is by doing to things. I show the vendor what has been sold in the last three months in the area by every agent and also show what we have sold in the last three months to.
For example if I feel that vendor home was worth between 350 to 380 I would market the home for 395 to start with
If you get no response then you have to be honest with the vendor and tell them straight out.But I agree with you always try higher price I’ve sold plenty of homes for higher prices.Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
Interesting…
I recently made an offer on a house where the asking price had a + against it. My initial offer was below the asking price. It was rejected, which I can understand, but I thought it was worth a try. I then offered above the asking price. It was also rejected. The agent came back to me with a sale price that was $15k above asking price and said that this was the minimum that the vendor was willing to accept. So why bother advertising at a lower price than what the vendor wants? The funny thing was that the estate agent then changed the advertised asking price to ‘offers above’ the price that I had offered. I didn’t pursue the deal and 3 months later the property is still on the market.C2011 wrote:Interesting… I recently made an offer on a house where the asking price had a + against it. My initial offer was below the asking price. It was rejected, which I can understand, but I thought it was worth a try. I then offered above the asking price. It was also rejected. The agent came back to me with a sale price that was $15k above asking price and said that this was the minimum that the vendor was willing to accept. So why bother advertising at a lower price than what the vendor wants? The funny thing was that the estate agent then changed the advertised asking price to 'offers above' the price that I had offered. I didn't pursue the deal and 3 months later the property is still on the market.Which raises the question, just because you should never ask for less than you want (which I agree with by the way) should you sell for less then you want? Or, to put it another way, should a want to sell outwiegh a wanted sale price?
Thanks, Kevin…I like the way you write.
Our agent convinced my husband to put a range on our property listing we recently had on the market. I thought it was ridiculous. We have never offered a price on a property that we didn’t think was worth it and by rule of thumb have always offered below asking price (as I’m sure everyone does) because buying property is a negotiation. Therefore the price most people list their property for is usually a little above what they really want. A range to me is confusing! Of course I’d go the bottom figure! When we relist it will be a real figure that is slightly inflated on what we really want!
The other thing is that the agent wanted us to list the property $20,000 below the valuation. What????
I know property is slow in Perth but I’m not going to give it away! Luckily it wasn’t do or die and we will hold it until we get what we want!
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