Why Has the Asking Price Gone Down?
Alistair Helm reported that the asking price for properties has gone down in the last month and I asked myself, why?
It is part of the new REAA rules. In the past ‘agents’ would stroll up to an appraisal with a figure in their head that the prospective client/vendor would love to sell their home for. In the trade it is called ‘buying a listing’. This blows all the agent’s opposition away as they have given a more realistic price. They get the listing and then start a campaign where the price is not mentioned as it is too dear. This is usually POA. Within weeks their client is told that no one is coming to the open homes, because the price is too high and they should reduce it. The price will reduce until it is at the level the opposition had given the client in the first place. The trouble was that they were tied into a 3 month or longer contract.
We gave a realistic figure for a property and the client said I am getting other agents in to see what they say. A rival got the listing at a higher price. A month later it was at the price we gave, but by then a lot of buyers who had already looked it over, would not be considering it again. What had happened there was that the chance of multiple offers pushing the price up had now become none existent.
With the new rules agents have to go to a listing presentation with statistics on what houses are selling for and have to state the reason why the client’s property will sell at the price they are quoting.
The result is that the stats are showing what houses are selling for and the client can now see what their property will realistically sell for.
As for us, we find that our properties always attract more attention than the dark, wonky and two lines of description the other agents produce, so that we get more people through our open homes and thus more offers. We always get very close to or better than what the client wants in their hand.
Work harder on the presentation and the end result will be easier. Here is an example http://www.realestate.co.nz/1180468
January 16 2010 01:22 pm | New Brighton and New Zealand and chch and christchurch
Alistair Helm on 17 Jan 2010 at 12:55 pm #
Steve,
I applaud your insight, this issue had not come to my attention. I think you could be right. The new act does require greater accountability and disclosure and as a consequence we may well see the impact in listing price.
This warrants a follow up blog post – many thanks for bringing it to my attention.
Steve Koerber on 17 Jan 2010 at 8:12 pm #
Spot on Steve, well done.
Carl Slade on 10 Feb 2010 at 3:34 pm #
Steve,
Totally agree with you. It’s great to see the new act is having an effect on those agents who “bought” the listing.