No Price Marketing Needs a Deadline and Big Ads

No Price Marketing Needs a Deadline and Big Ads

With 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 market reality.

Either way there is a growth in properties marketed without a price and the poor buyers are seeing all sorts of indications on advertisements.

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 interest.
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 most
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.