Meaningless price tag

Lower north shore in Sydney add 15% to the "Price Guide" (and I use the term loosely...).

 

Depends on the suburb, but most of the time when i look at the advertised price in Melbourne i just assume it's going for $70 to $100k more

 

Their reasoning is that they will attract a lot of buyers - the $500k buyers, who will possibly love the property and offer higher....hopefully get them to bid against each other and raise the price that way.

Our last PPoR sale - the Agent suggested this strategy (which I already knew about) and my argument back to him was that it will only attract hopefuls for a cheap Low-ball, or tyre kickers who can't afford the real price tag...effectively wasting everyone's time.

But; I went along with it at first; even though I knew it was a waste if time, and Voila!...loads of folks who couldn't get up to the desired price and a few serious buyers who wanted us to effectively give it away for free....2 months of this rubbish.

So; then we went the other way - after I cracked it and put the foot down - and advertised it at slightly above what we wanted (my original suggestion)...the interest died immediately of course; as the pricetag jumped up into a different price bracket where less buyers are.

Eventually we got a serious buyer who offered a bit below what we wanted (about 3 days before the Agent Authority ran out - they must have been shoiting themselves), a bit of negotiation after this, and we sold for less than what we wanted (we were in a "need to sell" position though), but not by a lot.

The suspicion is that when these Agents suggest that you start lower and try to move the Buyers up; they are trying to do 2 things;

1. Increase their Buyer contacts data-base,
2. Trying to condition the Sellers (after low offers keep coming in) to accept less by saying to the Seller; "The market is telling us the price is lower than we expected" so they can get a quick sale.

 

Some agents are worse than others but have also seen the opposite unexpected outcome (auction for deceased estate sold very low - to a known party, of course)

That pretty much sums up the agent you're dealing with and need to weed out before awarding them the sale.

 

it's a widespread view of Agents in general.

Having said that; there is some validity to their claim that they may be able to push up the price through increasing the volume of interest, but I think it is a far more transparent and quicker way to get closer to the Vendor's asking price if they simply advertise it at rhe correct price.

 

Just witnessed this today. I thought someone ran a massive bday party, but they all went to inspect a house underquoted by the agent.

Btw care to share some strategies for a novice (me) how to approach this underquoting scenario? Thx

 

Quotes from agents are not worth 2c. Do your homework on the area and understand the comparable sales well. Then when an agent says their looking at 600k you'll know its more like 720k.

Agent shenanigans with pricing will never go away imo. All the talk of fines etc blah blah blah. I see it all the time and tbh I understand why its done and I use similar strategies to sell my stock.

Best offence you have to agents quoting is understand intimately the comparable sales. If a comparable sold for $600k then you can bet your bottom dollar the one your inquiring about ain't gonna sell for $510k tomorrow, no matter what fairytale story the agents waffle off.