An agent who has been working hard to close a stale, discounted listing has highlighted the importance of realistic upfront pricing.
Logan Duncan-Smith from Investors Edge Real Estate in Perth said he is finally closing in on a buyer for a four-bedroom Woodbridge house, five months after it hit the market.
The property was originally listed for $1.25 million, before being discounted to $1.1 million, $1 million, $950,000, $850,000 and now $815,000.
“We got six couples through [for the first viewing] but we didn’t get anyone who wanted to make a genuine offer,” Mr Duncan-Smith told REB.
“The guy I’m now dealing with came through at the first home open and now he’s genuinely interested with the price revision.”
Mr Duncan-Smith said he had always felt the original asking price was unrealistic, but that the vendors had been more impressed by an estimate of about $1.2 million that was given by a bank-appointed valuer.
“I probably should’ve been a bit harder on them upfront, but at the same time they had a paid professional to come in and evaluate the property at a price that he thought was fair and reasonable compared to what else was on the market and what else was selling,” he said.
“In hindsight, I could’ve asked for offers from $800,000 or $900,000 and then tried to negotiate the offers back up. It’s a softening market here where buyers are looking for a bargain.”
Mr Duncan-Smith said one challenge that agents face is to explain to vendors that the listing price and the selling price can be two different things.
More realistic pricing translates into more genuine interest, which in turn translates into more competition and higher selling prices, according to Mr Duncan-Smith.
“Your home can have the best floorboards in WA, but if buyers aren’t coming in the door to look, they’re never going to buy it,” he said.
“It’s important to explain to the client, ‘I understand your property might be worth $950,000, but in today’s market the buyers dictate the value'.”
As the five-month campaign has dragged on, Mr Duncan-Smith said he has tried to keep reminding buyers about the property without making them feel harassed.