How to avoid underselling

(or not selling at all), even in a strong market

By Jonathan Irwin

12-05-2021 |
Selling a property is a significant financial event. Getting it right can make a big difference in the end result for the seller.

In a time when consumers are savvy, information is widely available and competition for buyer’s attention is fierce, outdated assumptions like ‘the place will sell itself’ can lead to wasted time and unrealised potential.

In most cases, the sale of a property for a less than an optimal price or not selling at all, even in a hot market, can be explained by the following three reasons:

1. Poor presentation

The poor presentation of your property can be detrimental to its ability to attract buyer interest, enquiries and inspection attendance. In most cases, a few simple and inexpensive changes can increase the perceived value of your property significantly.

Dirty windows, unpleasant odours, unkept grass, weedy garden beds, marked/chipped paint work, clutter, mouldy grout and worn carpets can all detract from a homes appeal and turn away potential buyers.

First impressions count to your potential buyer. You want them to get an unencumbered appreciation of the positive aspects of the property. Have a look at our presentation checklist on our website (under the 'Selling' tab), which can help guide your pre-sale preparation.

2. Inadequate marketing

High quality, multi-platform marketing with a broad reach is invaluable. Getting the key selling points in front of potential buyers is key to achieving a successful sale. By neglecting to do so, it is difficult to connect the ‘best’ buyer, the one who is willing to offer the ‘best’ price, for your property.

In the overall scheme of things, professional marketing costs very little compared to the value of the property. In many cases, its just 0.3% of the homes value. It’s kind of like taking out insurance.

Do properties sell without any marketing? Of course. But how can you be sure you’ve achieved the best price if potential buyers aren’t aware it’s for sale?

3. Incorrect pricing/sale method

Overpricing a property is a common way to put off potential buyers, for two main reasons.

People are time poor and don’t want to waste their time on a property that is not going to sell for what they perceive as a fair price. They’ll be more inclined to focus on properties where the price seems reasonable.
No-one likes rejection. A seller might think, ‘I’ll price well over what I’m really wanting and people will make offers’. This is not always the case. Buyers often feel embarrassed to make an offer too far below an asking price.

The incorrect sale method (i.e. Auction, for sale etc.) can also be a hinderance to the optimal sale of a home. The state of the market, location of the home and style of the property (unit, house etc.) will all influence the best method of sale. A good agent should be across the main options and be able to explain the pros and cons of each.

Case study

Recently, I received a phone call from a lady living interstate. She had been referred to me by her mortgage broker who thought I might be able to offer a fresh perspective on her problem. She was having trouble selling her previous family home, now investment property. It had been on the market for several months and was yet to attract a single offer despite the market being quite buoyant and the asking price being very reasonable. After learning about the house and what had been done to date, I made some recommendations I felt would help achieve a sale.

Some months later she called to let me know the property had not sold and asked if I could take over the sale. The changes I had recommended hadn’t been implemented.

Presentation

Previously, the property was tenanted, and a large dog was being kept on the property. This time around, the owners had moved back onto the property and were presenting the house nicely.

We also made some additional changes that I felt would help the sale:

* Minor painting & repairs ($300)
* Remove section of pavers and addition of lawn to rear garden ($1800)
* Alteration of shelving to walk-in robe ($500)
* Declutter/pre-sale clean (free)

Marketing

When previously marketed, the property wasn’t listed on Allhomes, the most popular property site in Canberra. This time around, we ensured the property was listed on Allhomes, our own website, Domain and Realestate.com.au to ensure we achieved the widest audience possible. To complement the property’s lovely street appeal, we used attractive ‘twilight’ photography, as well as a clear floor plan, social media marketing, email marketing, a local letterbox brochure drop and a large photo ‘for sale’ signboard.

Pricing

First time round, the property was marketed as a private treaty at an offers over price. As the market was strong, with demand outstripping the supply, we opted for a 23-day auction campaign.

The result

After 15 days on the market and 61 groups inspecting, our clients accepted a pre-auction offer of $805,000, a new street record by $225,000 & $85,000 above the previous asking price.

As this example show, without question, the presentation of your home or investment property, marketing strategy and sales approach will directly influence the success or otherwise, the sale of your property. At Irwin Property, we can offer a holistic sales process, based on many years of experience and a focus on our client’s best interests.

If you need help preparing for a sale, please get in touch. We’d be all too happy to assist you.