Asking price realism and flexibility needed for successful property listings

Listing a property at too high a price could be a costly mistake in the current Sydney market, especially if you need to sell.

But getting as close to your asking price or even more is important to feeling good about any property listing.

In an emerging slowing or falling market, the mismatch between asking and paid prices is likely to be at its highest, possibly due to pride or naivety.

To arrive at the right listing price, it's wise to research the recent sales.

These were your recent competition, so your estate agent should be able to prepare a comparative market analysis of comparable homes, detailing the initial price, how much the home actually fetched, and how long it took to sell.

Sales so far this year are relevant, but look back to 2017 to understand how prices are trending.

Don't just appraise the prices on the handout or the computer, best also go and see how your offering stacks up against the sold stock.

A drive by the homes provides a curbside appraisal, and you ought be popping in to open houses so you can get a better sense of what buyers are paying.

Pricing was less of a challenge in the recent hot markets when the scarce inventory triggered enthusiasm among overly keen buyers.

Discounting on asking prices is however normal, and CoreLogic currently puts it at 5.6 percent for private treaty sales that are taking around 31 days. This time last year it was a 4.1 percent required discount after just 27 days on market. 

Houses in the UK have been selling at around three percent discount.

The biggest recent Sydney gap I've seen between asking price and selling price was over 20 percent. They wanted $27 million and took $21 million in Sydney's pricey east.

But is is happening in suburbs all over Sydney.

No wonder buyers reckon the market is falling their way, so it might be wise for vendors to marginally underprice to get ahead of the curve.

Especially if you are upsizing and have secured something at say 10 percent off.

Any price indication needs to ensure you gain maximum buyer interest.

Certainly if you don’t get any interest or offers in the first week or so, especially for auction listings, then it's likely you’ve priced too high.

Much of the pricing process relies on trust in your knowledgable estate agent.

You want honest advice from day one, so don't fall for the agent who volunteers an extraordinary potential sale price simply to get your listing.

Check their own asking price to sale price track record as these agents will seek to crunch your expectations sooner or later.

This week saw a forecast that Sydney house prices are likely to fall 4.2 percent this year, although Moody's Analytics said the correction would be short-lived, with prices set to recover a modest 0.9 per cent next year.

It's best remembered that our property market is fluid and complex in actual individual outcomes. Property pricing is, after all, emotional not prescriptively scientific.

This article was first published in the Saturday Daily Telegraph.

 

 

 

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

Tags: 
Asking Prices Residential Listings

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