The Property Game - Discounting your house

Following on last week's fairy tale concerning availability and exclusivity, I'd like to examine the topic further with an emphasis on human behaviour this time. Sellers, particularly in a buyer's market, which is hard upon us, need to market carefully if they are to be effective in both selling and realising the best price possible.

Some behaviours that should be noted:

  • We visit show houses. Period.
  • We like to compare.
  • We want to think that we are getting a bargain.
  • We want it more if someone else also wants it.
  • If no-one wants it, we become disinterested or sceptical.

Given the above it would make sense not to give an open mandate to a number of agencies to market your house. If they do all run adverts in the same publication, a seller would probably pick up on that and this creates an impression of either greed or lack of professionalism that could lead to a substantially lesser offer.

This also occurs when arriving outside a complex with a number of different boards up. If you've given your property to more than one agent they will all have boards up outside to advertise the fact. If I'm looking to buy in an area, I want to placate my conscience that the money I'm about to spend is being well spent while my curiosity wants to know what else is happening in the complex. Ergo, I'll phone all the boards outside to ask about the properties. The agent won't know that I'm sitting outside the complex and will tell me about the property. I'll realise that it is the same property as the one on show and we're back to a bad deal for the seller.

Simply put, if you are looking to realise a good price don't give it to more than one agent. Some other things to consider when selling:

  1. Don't ask too high a price.
    Some people think that this will give them room to negotiate. An unrealistic price will mean that buyers will walk across the road to that better priced house and put and offer in there. You won't have the opportunity to negotiate.
  2. Don't put it on show week after week.
    Buyers quickly become aware of 'that' house on show again or eventually 'still' on show. This detracts from that element of elusiveness and demand that needs to be created to achieve a high price.
  3. Don't negotiate on your price or criteria.
    If you don't move to a market valuation of your property and compromise on other items, people quickly walk away form the deal.

You'd think that these things would be obvious but they're not judging by the number of people that do just this. It starts by not following a process and having a decent partner to advise you on your marketing plan.

If you're selling your house now, remember the above simple human behaviours and market accordingly. Also remember the Princess and Froggi from last week! If you want to live happily ever after, don't leave it to chance and your dad. Market carefully.

Article by: Dave Welmans - (www.thepropertygame.co.za)