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If you have been in the market for a new home over the past few years, there is no way you would have escaped the frustration of property ads that don’t have a price guide.
Properties are being marketed without a price and with instructions for interested parties to “contact agent”. Even if you haven’t experienced this as a buyer, you would, as an agent, have seen countless listings that protect the price and put the onus on the buyer to seek price information.
The method of withholding price has become all too common and has been deemed a strategy designed to avoid putting a ceiling on the price and achieving top dollar, but does it accomplish that in a market that has so much access to sale data and so many tools that can reveal a property’s value to a certain extent?
We saw the rise in popularity of auctions during the pandemic, but as the craziness has settled and buyers have reverted to implementing thorough due diligence, the number of auctions across the marketplace has simmered down.
During this time, we have seen an increase in marketing campaigns that have all the bells and whistles – just no price, leaving it to buyers to chase the agents for a guide. There’s a perception that this approach is just as effective as an auction, but I hate to break it to you, it simply is not. The omission of price is not the reason an auction generates top-dollar results. There are so many other elements in an auction campaign that simply cannot be achieved with a price-free campaign.
For instance an auction, while not displaying a price, has a deadline which gives buyers a sense of urgency for purchasing the property. A price-free campaign cannot attract the urgency as the result is completely open-ended. With auctions come competition – another critical element of an auction campaign that cannot be achieved with a price-free campaign. A deadline creates urgency, while urgency invites competition between buyers as they know they only have a set time frame to beat out other interested parties to purchase.
Another vital output from an auction campaign is an unconditional sale. Price-free campaigns, while not really creating urgency and unable to strike the same competitive chord as an action, are also limited when it comes to achieving unconditional contracts. A private treaty campaign generally comes with conditions and requirements to be met, making it riskier, longer and more cumbersome than an auction sale.
A property campaign without price information may feel as though it is protecting the potential price and generating top dollar, but it simply misses the mark in comparison to an auction campaign that mixes so many other vital ingredients for success. An auction campaign brings transparency, while creating urgency and competition, and will undoubtedly extract the highest price from the marketplace whether that be before, on or after auction day. The same cannot be said for a campaign that simply omits the price from advertising.
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