Talking things through with a new client this week, the question of price was inevitably raised (and rightly so). What price should we list at, and how should this fit in versus the appraised value – do you aim for the middle (and presumably a faster sale) or set your sights for the stars and aim above just in case there is more money out there?
As in many things, it can be a question of priority. When looking at a value range for a property, it often looks like a bit of a pyramid (and I am sure this is a training image that’s been around far longer than I have). For the same given object (or property in this case), a relatively small number of people will attribute a higher value, a larger number of people will attribute a medium value, and when its cheap then everyone wants a crack. If time is of the essence, then you’ll often see a lesser price to make sure the largest possible number of buyers are engaged. With the benefit of time though, you can focus more on maximising price over anything else.
If you want to get that top tier of price, then you need to identify who is going to pay it, rather than just going high and hoping, as some can be wont to do.
A great example of identifying your target (prime) audience is with 5 bedroom homes. For a lot of people, the extra bedroom is probably unnecessary – nice but unnecessary so there isn’t going to be much value attributed to it compared to a smaller 4 bedroom. For a larger family though, there would be a much greater willingness to pay a premium for that extra space. Gear towards that buyer type (or wait to find them) and you will generally see your better outcome.
Aside from targeting your message very specifically (Kia Carnival owners, anyone?) having a marketing strategy that takes into account a number of media (online, signage, social etc.) is critical to make sure that your carefully crafted message gets where it needs to be. More potential buyers means more potential options, so avoid the temptation to go a little light-on here, even in a strong market.
Regardless of your price strategy though, make sure you listen to feedback. You’ll know quickly if you’ve hit the mark or not, and a small change made early, hurts a lot less than a big cut too late.