Old Soldiers never Die

I'm sure Donald Trump won't mind me using one of his quotes. It's a ripper and really describes the kind of market we are currently experiencing.

This quote should get you thinking about pricing.

"Over priced properties are just like old soldiers....... They never die, they just fade away.

Donald. J. Trump

That really hit's home for me.... If this quote is good enough for one of the greatest real estate tycoons in the world it's good enough for me.

It can be read as this:
Over priced homes never sell, they just sit there and get forgotten about.

Who forgets about them?

Buyers forget about them because they know what is good value and what isn't. In a buyers market, like the one we are currently experiencing, buyers have the power. Buyers determine who sells and who doesn't because they are spoilt for choice.
Buyers will always choose the property that represents the best value to them; in a sellers market when there's a shortage of homes for sale they take what they can get and paying high prices represents good value. In a buyers market they have plenty of choice so they can pay less and once again buy what represents good value.
Over pricing, especially in a buyers market will cause you more trouble than it's worth and by doing so you run the risk of becoming "that place with something wrong with it" amongst buyers.

Agents forget about them because after weeks, months & possibly years (it happens) agents get tired of trying to convince over pricing home owners to reduce. Over priced homes often do the "merry-go-round" of every agent in town and become known as "that listing".

You may ask, why does an agent take a home on in the first place if it's over priced? Good question, I ask it all the time!
It could be said that agents cause this trouble by encouraging over pricing in the first place... I agree!

Unfortunately there are some agents out there who over price property intentionally so they can get the listing. This is not acceptable to me or to the majority of agents in my industry.

Unfortunately there is a minority of agents that try this on.

ALWAYS list with an agent who takes the time to give you evidence of the market. Make sure they don't just agree with you without going through a proper presentation. A presentation should include a pricing strategy and reasons for that strategy. It should also include a candid discussion about what the market is doing and what realistc price you could expect. If an agent suggests or agrees to a higher price, that agent should be giving solid evidence as to why and what strategy they have in mind.

If they don't do this or they can't justify anything they say simply ask them to leave.

The over pricing home owner forgets about it because they become frustrated with waiting. Over pricing home owners tend to lose hope after a period of time. They feel convinced that their property won't sell (it wont either unless they drop their price) but at the same time they remain convinced that they can get their asking price.
These owners usually say things like "someone will come along" or "We're prepared to wait". The truth is that often they want too much because they have already spent the money elsewhere. That is they want to do something with the proceeds of the sale so they need that high price. Don't fall into this trap, a home is only worth what someone is prepared to pay for it.

Summary
A good pricing strategy should take 4 things into account:
1. The current market and what it is doing
2. What sort of price the home may attract in the current market
3. What the home owner would like to acheive
4. Allowance for negotiation from buyers

It's a fine line to determine, especially in a buyers market. It is important that you employ an agent to help you through this process. You need a price that is not only competitive but also allows for the negotiation "game" that buyers play.

For advice buying or selling - Halliwell First National Real Estate
http://www.halliwellfn.com.au/
(03) 6424 1496

Alan Halliwell - Director