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Potential price just Russian roulette

By Michael Crawford
11 November 2014 | 1 minute read

Announcing the potential sale price of a home is a sure-fire way to prove to vendors an agent doesn’t understand the market, with one industry heavyweight comparing the approach to playing a game of Russian roulette.

Re/MAX WA managing director Geoff Baldwin said the best agents will simply not get into a price argument but will always demonstrate methods that ensure maximum price, and for many reasons this is rarely achieved by promoting a property with a fixed asking price.

Mr Baldwin said, of course agents should discuss market evidence, recent sales, market conditions with their sellers, and a mutually-agreed expectation should be established, but that expectation should not be made public.

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“Methods such as auction and buyer feedback ranging are wonderful alternatives that ensure prospective buyers are not scared off by a high asking price and also that the eventual selling price is driven by the buyer's emotional attachment to the property and the negotiation skills of the agent,” Mr Baldwin said.

“Sellers often seek three or more appraisals and then demand the agents advise them accurately on how much their property will sell for, but the agent they should list with is the one who refuses to play that game of Russian roulette.

“To test this theory, sellers should ask themselves this question: If three buyers wanted to make an offer on my property and none of them knew my asking price, how varied could the offers be?"  

Agents said often they don’t have to play the game because buyers and sellers have largely done their own homework.

Andrew Merton real estate licencee Bev Kelly said, basically buyers are trying to buy whatever it is for less but don’t have the data at their fingertips to tell you the reason.

Ms Kelly said, unfortunately some punters are using outdated information that could be telling them the wrong information about the market. Sensationalist property-related stories in the press do not help either, she said.

“Some buyers and sellers are very educated and have a very good idea what the recent values are and the real worth of a property,” Ms Kelly said.

“A lot of it depends on whether a buyer is an investor or buying for themselves to live in, and we are finding more investors now becoming emotionally tied to a property and coming in and offering more than we expect, but we have also had the opposite happen."

Craig Connell from Craig Connell Reality said buyers and sellers today often have access to too much information. Mr Connell said occasionally sellers are over-estimating the value of the property, but by and large have a good understanding of what it is worth. Mr Connell puts a lot of the knowledge down to the local grapevine.

“A lot of more mature buyers and sellers know what price the property previously sold for already because they have talked to the neighbours or remember what it was bought or sold for last time,” Mr Connell said.

“Often they have convinced someone younger to do the research from RP Data for their purchase.”

Potential price just Russian roulette
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