Would two per cent make a difference? If your preferred holiday was $3000 or $3060 it wouldn’t matter. And $1,000 wouldn’t stop you buying your favourite $50,000 car. But in a property market like Brisbane’s inner city is currently experiencing, home buyers and investors alike seem reluctant to make offers. One told me last week that a $500,000 Brisbane apartment they’d seen was too dear. “Not worth more than $490,000”, they said. For others it’s just 3 or 4 per cent ‘overpricing’ that stops them buying. So in this newsletter we thought we’d remind everyone about an idea called “making an offer”!
Sellers are sometimes reluctant to drop their listed price until they’ve seen the colour of buyers’ money and a real estate agent can’t offer you the property at a price cheaper than authorised by their client. They need to be careful in encouraging you without harming their sellers’ interests. And some buyers feel embarrassed and awkward suggesting an offer. Maybe they’re concerned they’ll offend the real estate agent (hard to do in our opinion!) So the standoff drags on.
We’re currently watching some inner-Brisbane properties sit on the market without action, even when their prices seem pretty close to the mark. Maybe it’s the internet gone mad. Buyers can sit back with the property portals and, with plenty of accuracy in many cases, forecast a home’s true value. There’s danger for sellers in staying on the market too long so they need to monitor the activity at their inspections and have an agent whose feedback they trust. The Bees Nees team had an average discount from asking price to selling price of just over 1% in the past 12 months – we’ve been negotiating great results for our clients. But right now the market’s sensitivity to price seems to be at an all time high. An auction can help avoid the price problem but it’s not, in our opinion, the right solution for every property.
One final thought: for those of you who’ve owned your home for more than 5 years just think back to the day you bought it for a moment. Would you have paid another 2% to get the right place? We always get the same response to this question!
How do you set the right price? We’d love to have your comments.