So, we all probably know by now that buying property in a surging market can be challenging. But what about selling property in a surging market? That should be a breeze, right? Well, it can be, but there’s a little more to it. Have you properly considered what will be the best strategy to ensure you land a top price? Are you adopting a strategy that is right for you? Whatever the case, selling your property in a market like this one can have its challenges.
One thing that is a pretty safe bet, if you have a good agent, understand where the market is at in terms of price, and if you listen to the advice of your agent, you should be able to land a reasonable price for your home in a very short amount of time.
1. Pricing: Listing Low vs Listing High
Here’s something I’ve heard a few times from homeowners looking to sell in the current market:
“The market is surging at the moment and I’m not really in a rush to sell, so I want to advertise my home at a high price and see what happens. If I don’t sell it straight away, that’s ok. The market is growing so it will catch up to the price I want”.
That would be nice, but it usually doesn’t go that way.
In a free market (which is what our property market is), what drives price? It’s supply and demand, or the level of competition (number of buyers) relevant to the amount of available supply (homes for sale). And what is one of the factors used to drive up demand? Price! A lower price will generally increase competition. I like the phrase, ‘list low sell high’. Don’t list high only to sell low.
So, pricing your property just below where you feel the market price is for your property will help drive a higher level of enquiry. This generally encourages more buyers to come to your home opens as the value proposition of your property appears greater. Enquiry is king! If you can manage to get 20 or more buyers through your home opens, that volume of competition is going to drive a higher price than if you only had a handful of buyers through.
Sure, the market is currently hot, but the market is also more informed than I have ever seen it and buyers generally don’t have time for overly ambitious sellers. They tend to just walk away and try somewhere else.
My takeaway: Listing slightly lower than the targeted price will help generate more competition and in turn this is what will help drive the price up.
2. Is your property at risk of becoming stale?
Now, the second part to the pricing is, if your property has had to sit on the market for a long period while you wait for that higher price, it can become stale. Once the market perceives your property to be stale, it can be a hard road back to land a good deal. Even if prices keep growing, the perceived value of your property might not be. Now you don’t get the opportunity to talk this through with buyers. They simply might not enquire or come to the home opens so you might never get the chance to explain your case.
From what I’ve seen recently, buyer perception has become a more prevalent issue than usual. I’ve recently had a few buyers suggest to me that if I didn’t sell the property in week one, my client would have to drop the price. This is certainly not something I agree with, but it goes to show some of the perceptions out there.
It certainly doesn’t help when the media perpetuates things with various images of long extended queues for home opens and inferring that everything is selling before the first home open. It’s kind of like some people thinking the toilet paper supply for the state is about to run out and grocery stores may never open their doors again. While my view is, it’s no cause for concern if you don’t sell your property after the first home open, it certainly helps to secure a quicker sale and I believe improves your chances of landing a better price, if you are priced right from the get go.
3. Your first offer is usually your best offer
Let’s say you’ve just listed your property and away you go. There’s an old saying in real estate that your first offer is usually your best offer. Now, obviously this isn’t the case every single time but it’s often a true representation of how things go. Once a property is listed for sale, over the first week or two, interest is at its peak. If you get an offer around this time while the interest and competition is at its greatest, do you think it’s possibly going to be a good offer relative to where the market is? Or is an offer four or six weeks later when interest has declined likely to be better? From my experience, it’s rarely the latter. I refer to the saying, “a bird in the hand is worth two in the bush”.
Sure, maybe that one buyer who just absolutely loves the property, and must have it, comes along after four or six weeks and you manage to secure a great price. The only thing is this buyer generally doesn’t come along all that often. Of course, it goes without saying, you still must be sure that the first offer is in fact a good one!
4. Selling off market
Should you sell your home off market? Well, I guess it depends on a few things and can be very much a personal preference. I know home opens can be a drag. Preparing your home every week, making plans to be out of the house or having a bunch of strangers walk around your house. These are all things that might not be overly desirable nor is paying for marketing costs. But what if it meant the difference between a good price and a great price. This could be in the tens of thousands, if not the hundreds of thousand depending on the price of your home.
Sure, the market is hot right now so selling off market is much easier than it usually would be, but is it the best decision for you? If you want the absolute best price, you need the competition that can only be gained through an open market sale. RP Data currently shows that the average days on market for Melville is only 13.5 days, so could you bear one or two home opens for an extra ten to a hundred thousand? Sounds bearable to me, but that preference is entirely yours. Some of us might like the idea of a more private sale and I’ve never seen a better time to make the most of that.
To cap things off, don’t forget some of the basics when selling your home:
- Do a thorough clean and don’t forget your windows, mirrors and shower screens.
- Declutter and get some advice on how to best present your home.
- Have you considered if staging will be beneficial for you?
- Work with your agent to see if there are any touch ups or minor repairs that can be done to improve your chances of securing a great result.
- How is the garden looking? Does it need tidying up?
- How is the front of your home looking? It’s the first thing people see.
- Do you need to do any painting?
- How is the lighting inside – do you need to get new globes?
- Do you need to put your bins out of site?
- Put your valuables away for the home opens.
- Did you get a building or termite inspection when you bought the property? If not, you may want to consider getting them done to get ahead of any possible issues.
If you want to have chat with James before you make your selling decisions, he is happy to help. He is best contactable via email at email@example.com or on 0447 120 125.
Are you looking to buy a property in the local area? Take a look at James’ top things to consider when buying in a surging market.