Price guides or no price guides
This week, I wanted to highlight that pricing strategy is so crucial to securing a great price, and one I believe many agents underestimate. Understanding market dynamics and buyer psychology is paramount to pricing a home correctly. It can cost an owner hundreds of thousands of dollars, in some cases millions if done incorrectly.
There is one strategy that I take exception to, and that is a property coming to market without a price guide. It's a trend that has gained momentum in the Lower North Shore over the past 24 months, and despite its prevalence, I still struggle to comprehend it as a viable strategy.
At Atlas, we engage with thousands of buyers every week and closely follow market developments. It is, after all, our job. When a property enters the market without a price guide, potential buyers express a sense of confusion, frustration, and a lack of engagement. Properties without a price guide often end up establishing one, either formally or informally, within one or two weeks. The rationale behind this approach is that buyer feedback helps determine the appropriate price range.
My suspicion is that the property initially entered the market with the seller's expectations or agents' inflated price opinion well above the actual market value, potentially as a means to secure the seller’s business. As the marketing campaign progresses, the focus shifts to bridging the significant gap between the initial price and the value perceived by buyers. Unfortunately, this strategy presents a major drawback—some of the most promising buyers tend to emerge within the first two weeks of the campaign. Drawing from my experience, I firmly believe that pricing a property too high or not providing a price guide at all risks alienating potential buyers, eroding trust, and inadvertently highlighting the property's drawbacks.
Trends consistently indicate that by accurately pricing a property, you are more likely to present its value and accentuate its positive aspects, thereby creating a competitive environment that every homeowner desires.
To anyone contemplating selling their home, my advice is to understand the market dynamics and analyse the starting and final prices of comparable properties. Above all else, ensure the agent has a proven strategy in place to get you the best outcome.
If you require assistance in compiling this information or like to know more about the current market please feel free to get in touch.