Yes, the market isn’t what most sellers would like it to be. Difficult economic times are definitely impacting buyer demand. Inflation is increasing, incomes are not, and many businesses are taking strain under the conditions. The result is that buyer demand has decreased. It’s a reality, and there is nothing that any agent or seller can do about the state of the market and the economy.
But that doesn’t mean that, if you’re selling, you can’t achieve a good result. In order to do so, your selling strategies will need to change.
As with all markets, when demand decreases and supply increases there is usually downward pressure on pricing. We’re seeing the same happen in the local property market. Volumes of sales are down by about 50% in most price ranges.
There is no need to panic. It doesn’t mean that property prices are drastically falling. What it does mean is that buyers now have more properties to choose from and they are only reacting to properties that represent the best value.
We sometimes have sellers suggest to us that the price on their property has no bearing on buyer enquiry. Nothing could be further from the truth. Price creates interest. That’s why shops have “sales”. It doesn’t matter how much you want a product. If the price doesn’t reflect the fair value you won’t be purchasing it.
The facts clearly show that we’re in a very different market to the one we’ve become used to in the last few years. It’s hard to believe that many agents haven’t adjusted their strategies to cater to this very different market. The result is that properties will sit on the market with few viewings and no offers.
So what needs to change to get a result? For one thing, the approach to pricing needs to change. If there are 50 properties on the market with a similar offering, buyers won’t view them all. They will view the listings that seem to represent the best value. Their shortlist won’t include overpriced properties.
Our research shows that buyers react to properties that are listed at less than 5% above market value in this type of market. If you’re 15% overpriced you simply won’t attract the right buyers. Despite this, we see many agents overpricing properties by as much as 35% in order to “buy” a listing.
This practice of overpricing isn’t only unethical, but it will cost a seller dearly when they have to sell for less than market value after many months on the market. Don’t’ fall into this trap. More than ever, your pricing is critical to you attracting the right buyers and selling for fair market value.
In addition to pricing, there are other strategies that need to be implemented in order to achieve a sale in a tough market. If you have a property to sell, select an agent who can demonstrate what they are doing differently in the current market to get you the result that you deserve.
Principal, Harcourts Platinum