With the general slow-down in the Auckland real estate market over the past 18 months, there has been a noticeable shift away from auctions and an increase in other marketing methods such as “By Negotiation” or “Asking Price”.
The issue of whether to mention a price in your advertisements is one that can polarise real estate salespeople and home owners. Some feel strongly that the price should be left out, others think it should be included. There are advantages with each approach, so I will outline them below to help provide you with a balanced view:
Arguments for not listing a price in your advertising:
- Some people prefer privacy and don’t want their friends and neighbours to know what their house is worth.
- If your home is a “one-of-a-kind” property, it might be impossible to determine what the market would pay for it. In these situations, it is probably better to let the buyers tell you how much it’s worth by utilising a ‘no-price’ method such as Auction, Tender or By Negotiation.
- An asking price may deter buyers from viewing your home based purely on affordability. You don’t want to put these buyers off because once they’ve fallen madly in love with the property, it’s amazing how people can will often find an extra $10,000, $20,000 or $30,000. This won’t apply if the buyer’s budget is $100,000 short of what you want!
- If you list a price and there is a buyer who would have paid more, you will lose out on the windfall. Occasionally buyers will pay more than the asking price, however this is limited to a situation where there are multiple offers being made at the same time.
- If you are selling your home by auction, you will not mention a price. You want the process to do its work. You do not want to sway or deter any bids by mentioning a price.
- A well-crafted advertisement will capture the attention of your potential buyers. If they don’t see a price in the ad, they might want to contact your salesperson for more information. This gives your salesperson the chance to qualify the buyer and stimulate their interest (this argument has a counter-argument which I will cover below).
Arguments for listing a price in your advertising:
- A listing price lets potential buyers know one of the most critical facts about your property. If you don’t mention the price, you may actually deter buyers. I know of buyers who have incorrectly assumed a property was out of their price range (and hence did not view it), when in fact they were able to afford it.
- Many buyers become frustrated when there is no listing price mentioned in the advertising. They may simply bypass the listing and move on to the next one. When speaking to buyers for properties I have marketed with an asking price they have often said how ‘encouraging’ it was to know the owners expectation and whether this matched their purchase budget. You don’t want to miss out on these buyers.
- Listing the price in the advertising significantly reduces the number of ‘time-wasters’ and ‘tyre-kickers’ you and your salesperson has to deal with, allowing more time to focus on the genuine buyers.
The issue of whether to include a listing price or not in your advertising depends on many variables, including the property type, the location, the price band, market conditions, the seller’s situation and much more. There is no right or wrong answer. To find the best approach for you, discuss your options with a good real estate salesperson who can assess all these factors and provide you balanced advice.