Why Don't Agents Price Properties?

We’re about to answer one of the most frequently asked questions that we get from buyers everyday: Why don’t real estate agents price properties?

Picture this: You've been eyeing the real estate market, eagerly waiting to make a move. As you scroll through the likes of realestate.com.au or domain.com.au, however, you come across an abundance of properties listed as 'Contact Agent', 'Offers', or 'Set Date Sale'. But where is the price tag? Welcome to the 'no price' strategy. Though it might seem frustrating at first glance, we promise that there's a method to this seeming madness. Let's break it down.

If you've been a home seller, you probably know the anticipation that comes with waiting for an appraisal, that magical number that reveals the worth of your home in the marketplace. But this task isn't always as straightforward as it seems. The emotional nature of selling residential property and the difficulty of making accurate judgements on homes, considering all their unique features and nuances, actually makes this quite a challenge. Add this to a marketplace where there is little or no sales evidence in some instances and the task becomes nearly impossible. Property consultants, no matter how experienced or specialised they are, can find arriving at realistic price guides to be extremely difficult when there are simply no comparable sales to that particular property.

Enter the new pricing strategy of no price at all. And yes, we know it drives buyers crazy but there is a well considered strategy behind it.

As real estate agents, our primary legal responsibility is to act in the best interest of our clients which are our sellers. If a property is difficult to price due to lack of recent sales evidence, experienced agents often rely on their gut feeling together with older sales evidence. So what if they get it wrong?

If they underprice the house, then they risk not acting in the clients’ best interest and selling the home for less than what it’s worth. And on the other hand, if they overprice the home, they risk alienating potential buyers with high prices and failing to sell the home, which also contradicts their clients' best interests.

As a result, you’ll see many agents are now choosing simply not to put a price on a property. You’ll see this expressed in many ways in the marketplace, like ‘Offers’, ‘Contact Agent’, ‘Set Date Sale’ or ‘Market Preview’. At Duet, we've adopted a strategy known as ‘Market Preview’. This is occurss when we refrain from pricing a home for the first two weeks or so, instead gathering buyer feedback during this time. If the property remains unsold after this period, we use the gathered feedback to set a price.

Rest assured, agents are generally open to sharing a price guide upon inquiry and they do have an idea of where the property should sit, they just require buyer feedback to determine this price. While this process may initially seem frustrating to a buyer, as a seller, it provides assurance that the property won't be undersold or overpriced. Market dynamics are continuously changing, and as they shift, it’s likely that we’ll return to conventional pricing strategies.

But until then, the key advantages of the ‘no price’ strategy are:

  • Greater flexibility for agents to adjust the price based on factors such as buyer interest, market conditions, and property competition levels.
  • Useful in fluctuating markets, allowing agents to keep the price guide competitive throughout the campaign.
  • Avoid price limitations which could lead to potentially underpricing or overpricing a property.
  • Attract a broader range of buyers.

The 'no price' strategy is a calculated approach that works in our clients’ best interest, ensuring accurate pricing while attracting a wider pool of buyers. If you're planning to sell your home, consider exploring this strategy. If you’re a buyer looking at a property, ask the real estate agent what the price guide is and they’ll be able to give you a guide on where they expect the property to sit.

As always, if you need any help in the process, get in touch with one of our Property Consultants who will be able to help guide you through the process and answer any questions you may have.

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