How would you like more buyers through your “opens” and more offers for your sellers to consider? According to Richard Hayden of Think Real Estate, hundreds of sales agents across Australia are now using the power of “no price marketing” to get more sales and reduce “days on market”.
In today’s real estate market where there are more properties for sale than buyers, and sale volumes and prices are down, you may like to look at the adoption of “no price marketing” strategies to attract buyers and create sales.
The term “No Price” includes for sale by auction and tender and also Private Treaty sales where properties are offered without a price. Whilst auctions and tenders are readily accepted by agents as conventional sales strategies, many sales agents are uncertain about offering a property for sale by private treaty without a price, and see it as very unconventional.
However, once you get your “head around” the concept it becomes a very productive method of sale which attracts more buyers to properties and produces more offers so you can sell a property in less time and at a price which will excite the seller. “I didn’t think “No Price Marketing” would work until I tried it,” says a top Ray White sales agent. She is working in a marketplace where the sellers still believe they can get a magic price and by advertising the “sellers price” she was getting no enquiries or sales!
She then adopted the “No Price Marketing Strategy” to Private Treaty sales and found the number of enquires increased, as did the groups through the “open for inspections” and the number of offers increased. “I was selling homes in days not weeks, and I’m talking about the 2011 market.”
SO HOW DOES “NO PRICE MARKETING” WORK?
Naturally, all legislation conditions must apply to any method of sale and with “no price marketing” you must not indicate the property will be sold below market value to attract buyers. You still have to have the “price discussion” with the seller before placing the property on the market.
The purpose of “no price marketing” is to generate interest from buyers and hopefully competitive offers.
The concept is very simple – if you publish a property’s price that is above the market price, you will not attract buyers. Too many sellers want “their price” which according to the latest statistics is about six to 12 per cent above the price the market – the buyers – will pay.
Using no price marketing as a Private Treaty method of sale, the sellers are encouraged not to place a price on their property for the first two or three weeks after the listing date. The property is offered as “offers over”, “offers invited”, or no price at all, but on the property web sites a hidden price range is given using the seller’s price range to help buyers select the property by price range.
BUT BUYERS DON’T LIKE PROPERTIES ADVERTISED WITHOUT A PRICE AND WILL NOT ENQUIRE ABOUT THE PROPERTY?
This is the biggest objection by sales agents as a reason why they should not use “no price marketing”.
However, this is not the case as buyers interested in the property will phone to get more details but if a property is advertised with a price which buyers consider is too much, they won’t contact the agency for more details.
As part of the “no price” marketing strategy, you need to advise your sellers of how important the first three weeks are when listing a property for sale and if they get the price wrong they will miss out on the best buyers. Most sales agents explain the “buyers curve” when giving a listing presentation and show the sellers that more buyers will be exposed to their property in the first 21 days of listing because there is a “backlog” of buyers, many of whom are ready to buy now.
If the asking price for the home is above the buyer’s expectation, they will not be excited and will take the property off their “shopping list”. Buyers will only be attracted to a property if they think they have a chance of buying it and the home offers good features and benefits for the price. Buyers search the web for properties and many search by price range so with the “hidden price range” to guide them, buyers know if a home is in the “ball park’ for price, and then they will ring the agency for more details.
THE FAST TRACK SALE
Many franchise groups have adopted the “no price marketing” method of sale by “branding” such listings as “Express Sale” and “Fast Track” and have built a whole selling process over the years particularly when dealing with buyers. Scripts and dialogues are very important for making “no price marketing” a success for the seller. When a buyer makes an enquiry, your answer may be something like – “I understand that you expect a property to be advertised with a price, but the sellers of this property do want to sell and they don’t wish to compromise their chances of selling by misrepresenting the price, so for the first few weeks of the marketing period, they have taken the price off and have asked for offers in the range of …..”
As part of the “no price” marketing strategy it is very important to encourage all buyers to the “open for inspection” so buyers can see the level of interest and to reduce “private viewings” to a minimum. Sales agents who have adopted Private Treaty “No Price Marketing” have found their “open for inspections” attract more buyers and it is easy to encourage offers because that is the process of no price marketing.
To obtain offers, interested buyers must believe they can afford a property before they can become interested in a home, so it is vital to keep a buyer informed of recent sales in the area that are similar to the property being offer without a price and based on those price ranges, if the buyers think the property has potential they will make an offer.
In some areas of Australia where the property market is weak, buyers believe they will get a bargain because there is no price quoted and care must be taken with presenting offers to sellers but with proper negotiations, the seller will achieve “market price” or better in a few weeks rather than wait 120 days!
If you don’t receive offers on a property in the first three weeks, you should be encouraging “price indications” from potential buyers so you can give price feedback to the sellers. However, the price indications from buyers may not excite the sellers and they may delay selling for a few months. If there are no offers but price indicators, the sellers will probably list with a price at the end of three weeks of marketing, and the price is likely to be very close to the market price so a sale will eventuate.
In summary, using the Private Treaty No Price Marketing method of sale will give your sellers a chance to obtain feedback from the marketplace very quickly so they can either accept an offer made in the first three weeks and move on with their life. At least they should have enough information to place a price on their property that would attract a buyer rather than asking “my price” and see the property become stale and unsalable at even a lower price than market price. No Price Marketing has been successfully used in all market conditions for the last 10 years and it only needs sales agents to get his or her “head around it” to start getting good prices for the sellers in difficult market conditions. And Private Treaty No Price Marketing is also a great way to learn the scripts and dialogues for auction listing and sales.
Richard Hayden has spent nearly 50 years in the real estate industry, selling houses in Essex UK in 1963. After developing a chain of five agencies with his partners, including a “One Stop Shop”, he joined AVJennings in 1972 as their Regional Marketing Manager in South Australia.In 1980, he became the Director of Trading for the REIQ and then went on to become the General Manager of the REINSW. Since 1989, Richard has been involved with Franchises including Century 21 as Regional Director and PRDNationwide as National Training Manger.He left corporate life in June 2011 and now is the Queensland’s Accredited Workplace Assessor and Trainer for Think Real Estate.