Pricing must be spot on from day one or this initial thrust into the market will be wasted in what RE/MAX WA managing director Geoff Baldwin calls the 'pricing see-saw'.
“While buyer interest is at its peak at the beginning of the listing, typically the price is such that nobody is compelled to go ahead and make an offer," he said.
“Unfortunately, when no offers are forthcoming the price is adjusted to lift interest, but in most cases it is too late and the listing stalls.”
A study of listings on the market for more than six weeks shows that, on average, the eventual sales price was reduced by around half a per cent for each additional week it’s on the market.
“One of the most asked questions when a buyer likes a property is ‘How long has it been for sale?’, and buyers love it when a property has been on for a long period because they feel they have more negotiation power, and they are often right,” Mr Baldwin said.
According to Mr Baldwin, there are several sophisticated and proven strategies to ensure maximum price is achieved, but also that potential buyers are not scared off by a high fixed price.
“It must be understood that the pricing strategy is not a component of selling the property; it is a critical component of marketing to attract buyers to view the property," he said.
“Once a buyer has come to see the house, the marketing - including the pricing strategy - has done its job and from that time onwards the buyer either likes the property or doesn’t.
“Marketing is designed to attract buyers to view properties, so if the pricing component of the marketing is wrong then buyer enquiry will be scarce or it will come from the wrong buyer pool.”