HOW TO SELL IN A SOFT MARKET
The clearance rate across Australia’s capital cities is currently around the 50 to 55 per cent mark. To compare, a clearance rate above 60 per cent represents normal market conditions and above 80 per cent represents a boom.
When clearance rates are low, it means the price that many sellers want for their homes is not the price that the market is willing to pay.
Pricing is probably the most difficult part of the selling process for vendors to come to grips with. You have to understand and get comfortable with the fair market value of your home in today’s climate.
If you and the market are not too far apart on price, a good agent may be able to get you there. The first step is to price your home correctly at fair market value and at a level you are comfortable with. (Importantly, you must never ‘underquote’ – this is against the law.)
Once you’ve got this right, a good agent will then use strategic marketing to maximise the level of buyer interest and competition for your home. Competition is the key. But buyers won’t come if you start your campaign with an unrealistic price.
If the price is wrong, even the best home in Australia can sit there unsold for ages. I have seen some of Australia’s finest homes sell for less than their true value after remaining on the market for an extended period. When a home takes more than a few months to sell, rumours can start. Everyone wants to know what’s wrong with it. People start focusing on all the negatives to do with the property.
The key to extracting a premium price for a property – in any location, at any time, in any market – is emotionally connecting a number of buyers to your home and creating competition between them.
But the asking price has to be fair and reasonable from the start in order to build the interest and thus the competition. And I emphasise this point – it has to be right from the start. Here’s why.
There’s a phenomenon in selling real estate that I call the buyers’ wave. What I’ve found is that the first three to four weeks that a home is on the market is when you get the maximum amount of buyer interest.
Think about it. Unless they’ve started looking this week, buyers are mainly on the lookout for NEW listings. After a few weeks on the home hunt, they’ve probably seen most of the suitable properties in their preferred areas and price range. So when a new property hits the market, there’s a great flurry of buyer activity, with lots of people attending inspections. After four weeks, buyer interest tends to tail off quite dramatically.
So here’s the challenge if you’re looking to sell in today’s slightly softer market, you need to get comfortable with fair market value and price your home accordingly. And you need to invest in an experienced local agent who has the marketing resources to attract the maximum number of buyers. From there, the buyer competition and the agents’ negotiating skills will result in the best possible price.
source: switzer.com.au
