Hello

There is always a lot of press online and in newspapers about an agent under-quoting a property and I would agree with upset buyers that it would be both frustrating and disappointing. After all, buying a house is often an emotional experience that can be full of ups and downs. Especially if you add selling a property to your experience. Having said that, what can be extra frustrating for the vendor is having an agent, to use an industry term “buy your business”. That is to inflate the likely selling price of your home in order to help win your trust and get your house for sale.

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I’ve got some clients that have just gone through this experience prior to meeting me. Their property was quoted around $100,000 more than what it will likely sell for. It was an investment property, so they vacated the tenants prior to going to market and to also do some minor improvements to help maximise their chances of a good result. The problem was they only had one agent appraise the house and that agent overinflated the likely selling price, which led to having a quote range well above market value. This in turn led to the auction being cancelled, due to lack of inspections and interest throughout the campaign the week that the auction was due to be held. They had spent $6,000 in advertising and approximately $9,000 in prior to market improvements and lost around $8,000 in rental income.

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So how do you pick up the pieces? Well, all was not lost. Instead of chasing the market down with the agent that got it wrong the owner bit the bullet and took the house off the market for a few weeks and used a new agent that is was realistic about the sale price. Therefore, the house was re-launched with a new advertising campaign and importantly a lower but more realistic quote range. This lead to an excellent result albeit, still not close to what the first agent had told them. However they ended up with 4 bidders at the auction and sold $30,000 over their reserve price. From the start it should have been an easy property to price as it was a 2 bedroom unit and there were a lot of comparable sales made within the previous 6 months to them listing their unit.

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I sometimes hear from sellers, “what do I have to lose by trying a high quote range?” and the answer is time, money and a great deal of frustration. I’m not a great believer of the term “quote them low and watch them go, quote them high and watch them die”. However, during a sale campaign it is always better to increase a quote range because there is a huge amount of interest and it has become clear that the property should sell well above the quote range, than chasing the market down by trying to lower the quote range.

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I guess the moral of this experience is to get more than one opinion of the likely selling price, ask for evidence of similar homes that have sold in the area and to be ambitious but at the same time realistic. A good agent would prefer to be slightly conservative regarding pricing than over the top. In my previous office we used to use the expression “telling the truth and getting away with it”. In broad terms this means being honest and being appreciated for it. I’m glad to say most agents that work in the market today are pretty good at pricing. In reality it is all about the buyers when it comes to getting the best price and if you can make them compete in a hotly contested selling environment you are most likely to get a premium result.