For a long time the strategy for selling properties in Mackay was very straightforward… list at a specific price, usually with a 9 at the end.
So properties would list for, say $499,000 or $549,000. It was very easy for everyone; sellers wanted to get as close as possible to the mark and buyers understood that but also knew the sellers were not looking for more than that.
As the market has changed and prices have gone up, agents such as me have changed the pricing advice to sellers.
You will often see my properties, and other agents, listed as “By Negotiation” or “Offers From” a particular price, say Offers From $499,000 or Offers From $649,000.
One of the main reasons for these strategies is to avoid putting a ceiling on the price at a time when the market is going up.
As much as we real estate agents love buyers and hate to play favourites, the truth is a listing agent like me works for sellers.
Don’t get me wrong, I love helping buyers and trying to line them up with properties that might suit them.
I enjoy taking the buyer through the process of buying a property and making sure they are given the information and assistance they need to make it as straightforward as possible.
But there is one central legal and ethical responsibility a listing agent has; to ensure they get the best price for their client, the seller. We need to create competition that ensures we get the best price for a client.
If we were listing a house, in a stagnant, plateaued market and recent history told us that similar properties sold for between $520,000 and $540,000, it made sense to list at $549,000.
But markets are dynamic and they don’t remain stable. Mackay’s market has changed and competition from buyers has pushed prices up this year.
That’s where pricing strategy comes into it. By listing at “Offers From” we are not creating a price ceiling in a rising market.
I might be selling a property in West Mackay, for example, and note that recent experience and statistics tell me similar properties have sold for between $470,000 and $500,000.
I will also be aware, in the current market, that prices are going up so I could well suggest to a client that we list their property at Offers From $499,000.
That price lists it in the ballpark of where statistics tell us it sits in the market but the “Offers From” strategy ensures there is no ceiling on the price. It allows us to create a competitive environment in which buyers can come forward with their best offers without the limitations of a set price.
Another option is to list at “By Negotiation”. Again, the strategy is to enable powerful marketing to create a competitive environment among buyers and for them to come in with the price they are willing to pay to prevent missing out on the property.
The auction method is another way of taking the price away and leaving the market to compete unrestricted by price guidelines.
I understand that all this can be frustrating for buyers who want to know exactly what price the seller wants.
But the seller’s understanding of where their property sits in the market can change once their property is listed for sale and the last thing we want to do is underprice a property.
Oscar Wilde wasn’t talking about real estate when he referred dismissively to someone who “knows the price of everything and the value of nothing”.
But while value is in the eye of the beholder, in real estate we need to ensure it aligns with price.
