VENDORS aim to sell their property for the highest possible price. As part of the marketing strategy, they usually add a percentage to their projected final price as a negotiating factor.
“Many vendors think that their final or bottom price is cast in concrete,” Bellarine Property managing director Christian Bartley said.
“They think that telling an agent ‘I’m not taking any less than $x’, will make the agent work harder to achieve $x.”
Mr Bartley said that vendors who insist on an arbitrarily set figure often have the opposite effect from what they intended.
“Firstly, if agents think your expectations are more than the market will bear, you risk making them think it is not worth putting too much effort into your property, because you will never accept the offers they are likely to get.
“Secondly, if the figure you have in mind is not the true ‘market value’, you are unlikely to achieve it. If you tell your agent to discourage purchasers who are not prepared to ‘go that high’, you may end up throwing the baby out with the bath water. In among the purchasers you turn away may be the one who, in the heat of negotiations, would have paid the most.”
According to Mr Bartley, just as vendors sometimes come down further than they initially intend to in order to sell their property, so too many purchasers actually extend themselves more than their first stated price range in order to secure that special property.
“If purchasers realise up front that their figure doesn’t match yours, they usually decide it’s not worth making an offer.
“If you don’t get that initial offer you can’t negotiate to a higher position. Agents and vendors alike sometimes overlook the importance of the negotiation process in achieving the highest possible price.”
According to Mr Bartley, agents who disclose their vendor’s rock bottom price are probably not skilful negotiators and prefer to avoid the negotiation process.
“Furthermore they (and therefore you) miss out on crucial information,” he said.
“It is valuable to know what purchasers are prepared to pay. You may turn an offer down first time round but if subsequent offers are in a similar range you can feel confident you have achieved market value.”
Mr Bartley said that while agents may be able to give you an idea of what your property is worth, it is important to realise that the figure they give you is only an opinion.
“The only truly scientific way of establishing the value of a property is to see what price the market will pay at the time of marketing.”
For further information, contact Christian Bartley on 0410 695 325, email firstname.lastname@example.org or visit bellarineproperty.com.au.