Price Marketing Needs a Deadline and Big Ads
the pace of the changing values in the market over the last
two years we have seen many properties marketed without
a price. This has its place when you run the risk of under-selling
the property by choosing too low a price and missing the
boat altogether because we choose a price that is beyond
Either way there is a growth in properties marketed without
a price and the poor buyers are seeing all sorts of indications
BEO, BBO, POA, By Negotiation, Open Tender, BER, Buyers
over etc. all so very confusing and frustrating for the
buyers. Many of these advertisements also lack a deadline
for buyers to take action and are far too small.
Too often we see properties listed without a price simply
to secure the listing and then they are sold within days
to an early buyer with assertions from the salesperson that
this is a great deal. And this is from the same salesperson
who said it's too hard to assess the value ñ
let's market it and see. Then they sell it before
any marketing. These are often the same people who criticize
auction for under-selling or not working.
Firstly let's look at no-price marketing in the Vendors
Done correctly no-price marketing will protect the vendor's
interest by not stating a maximum price. As soon as you
state a price the buyers know pretty quickly that they shouldn't
pay any more and in fact it's an invitation to see
how much less they can pay. Buyers are particularly comfortable
knowing what the maximum is and unless they are put into
a multiple offer position, they will always seek to pay
as little as they can. Not that that is wrong ñ it's
just what they do.
No Price also removes the risk that the vendor over-prices
the property and therefore attracts the wrong buyers. The
real estate profession knows that buyers follow listings
and advertisements - not salespeople and that so many of
them spend more money than they first declare as their budget.
Asking more for a property simply makes it compare badly
in a value for money sense when buyers look. They don't
spend less - they spend more on a better property.
An asking price also deters the buyer with more money. The
asking price suggests that the property is just not good
enough for them. They perceive the property as not good
enough and whilst the vendor would love them they don't
come. When no-price marketing is used correctly, with big-ads
these buyers also come and view and the property may well
suit and the savings they make will provide cash for those
improvements they might want to make. When many buyers are
attracted and compete for a property, these are the buyers
with the ability to pay a premium.
So why large advertisements?
No company or salesperson has all the active buyers. No-one
company or salesperson can say exactly what the most someone
will pay is until the property is marketed. Small advertisements
simply don't compete against the high profile marketing
many vendors are now investing in. These market savvy vendors
realise that the best prices for property are fetched when
the market is correctly targeted and given a time frame
to work with. The job of the large ads is to
Allow features to be described as benefits
Emotion to be written into the ad
Attract the best buyers before they go to other open homes
Provide space for pix that show the lifestyle the property
offers but leave room for the prospect to discover there
is even more
Target buyers that you are not yet working with
Attract the passive buyers who are not active but have a
dream property. So often these are the people who pay the
To let buyers know the vendor is serious about selling so
it is worth them investing time and money in looking and
preparing to buy
To write about what you can't see.
To tell buyers when it will sell
When this is done properly you will find you have a large
pool of interested buyers who then can be put in a position
where they have to compete for the property. That way we
get increasing offers and the buyer focus goes on winning
the competition and less on the price.
So why a deadline?
A deadline clearly spells out when the property is to be
sold. This gives all the buyers a fair opportunity to do
their home wok and be prepared to buy on the deadline date.
The deadline date also expresses a seriousness on behalf
of the vendor to sell and this further encourages the buyers
to do their homework and be ready on the day.
Understanding these issues leads us to the next issue.
How do we let the buyers know that someone else sees the
same value as them and they need to pay more? This is where
the auction event takes precedence.
The auction contract demands that buyers purchase on the
vendors terms in a contract more binding than a standard
unconditional contract using the usual Sale and Purchase
Agreement. This means that once the hammer comes down the
property is indeed sold.
Buyers are able to see the real competition. The auction
event is transparent and allows the buyers to see that to
own the property they have already mentally bought, they
will have to pay more. Seeing other people seeking to pay
slightly more than them gives buyers confidence that others
are seeing the value too ñ so let's bid again.
What we haven't discussed here is the carefully managed
strategy required by sales people to get and hold the buyers
attention from marketing launch until the sale day. For
both Tenders and Auctions this is the key skill once you
have the listing without a price, big adverts and a deadline.
Salespeople who don't have this additional set of
skills should either learn them or stay with the listing
with a price.
To list a property without a price and no serious marketing
runs a real risk of eliminating new prospects and limiting
the vendors options to those buyers that company or salesperson
are already working with. Take time to learn how to add
high profile marketing and no-price marketing to your armoury.
Learn too how to manage the buyer enquiry and hold their
attention until sale day. The results will increase your
sales, new listings, income and profile.