The debate over Price vs No Price Strategy is a difficult one. Obviously, either strategy, when used correctly will work, it’s just about knowing which Price Strategy or No Price Strategy to use and how to get that across to your seller.
Pricing is a great way to sell anything, providing it is priced right and priced where the buyers are. So where is that? This is the difficult question when pricing. Priced right is just slightly below market value where actual sales indicatives or comparisons actually are in a similar market within the last three to four weeks, that’s comparative sales. Providing you price the property there or there about, then you should be creating a competitive environment aiming to get the highest the market is prepared to pay.
The only problem with pricing and we all know that this is no secret, is that most sellers want more for their property than what it is worth. Even after you have shown them irrefutable evidence of indicative sales, they choose not to accept that. This is due to emotion taking over. This is their home, most likely their family home, the place they have raised their kids and spent a large chunk of their life in. When emotion comes into play, of course, the seller is going to believe the house is worth more than it actually is.
Pricing, although it can work tremendously well, can also be very dangerous if we allow the sellers to control where we price the property. If you want to price the property down where the buyers are, the seller may perceive this as you not having the confidence in getting them a higher price. So, price can definitely work against us as well.
Hence, no price marketing strategies were introduced through tender processes and auction. Obviously, with no price, it gives the agent and the seller the opportunity to focus on nonprice issues. This is something that good sales people have always learnt to do, to say other than the price, let’s focus on “does the product suit your needs? does it tick the boxes?” With no price, we are just getting rid of price right from the word go and trying to get the buyers focusing on the property’s merits. Does it have the required number of bedrooms? Is it close to schools? Does it tick all the boxes? Once they have ticked all the appropriate boxes, the buyers will then realise that this is a property worth pursuing.
Obviously, the biggest disadvantage with no price is that the buyers will want to know a price. Buyers want to know a price because they want to know what they don’t have to pay. It’s important to remember that we are working for and get paid by the seller, so even though the buyers are also our clients and we have a duty of care and facilitate the negotiations between both parties, in this particular instance though, we are working for the seller.
The other thing about no price marketing that is great, is it really gets buyers initiating the conversation by saying what they want. There are scripts for this situation, with my most useful script being the ‘No Price Offer’ script.
Certainly, there are advantages with price and there are advantages with no price marketing. As an agent, all you need to worry about is learning how to present both options to the seller.
When it comes to price strategies, there is a very simple and straightforward way of doing that, by explaining to them how pricing their property too high can have negative implications for them as opposed to pricing the property correctly. The two most powerful strategies that I teach my clients are the Pricing Pyramid and the Buyer Wave.
For no price marketing strategies, you need to be able to educate the seller on all of the benefits and advantages of no price marketing strategies, i.e. creating competitive environments in multiple times either before, on the day, or very shortly afterwards.
Ultimately, the agent needs to educate themselves on these different strategies, so they can properly explain and educate the seller. The great thing for us and one of the best things that I loved when I was an agent is, it’s not our decision. Your job is to present the facts and educate the seller in order to get them to choose. Usually, it’s the agent that is able to present all the facts and educate the sellers on price versus no price while not pushing the seller to either method and is best able to display their value. This is the agent who is more likely to be chosen to list and sell the property.
To learn more about the price and no price strategies, the Pricing Pyramid and the Buyer Wave, and to receive my ‘No Price Offer’ script, make sure you register for my 1-day Real Estate Intensive workshop by securing your FREE ticket.
I look forward to seeing you there.