When you are selling your property, there are three prices to be acutely aware of:
- Marketing Price
- Current Market Price
- Best Selling Price
Marketing Price is the price the agent markets the property at to buyers. Legally and practically speaking, the final selling price may be higher, lower of equal to the marketing price. Some agents may deliberately price above or below the current market price creating either a frenzy or a standoff with buyers in the process.
Current Market Price is the fundamental value of your property. When an agent or valuer assesses your property’s current market value, they are not stating that you can’t or won’t achieve more. It’s more a case of stating the fundamental value at that point in time.
The Best Selling Price is the price the best buyer in the market is prepared to pay for your property, at the end of a well run campaign. This is an unknown figure at the time of listing, but some vendors and agents may engage in (futile) guess work in anticipating what the best selling price will be. However, until a campaign has been run and a buyer has been sourced, it will only ever be guess work.
The key to ensuring your agent delivers the best selling price in a timely fashion in to use the right marketing price. The marketing price is sometimes determined by the vendor, sometimes by the agent and often between both agent and vendor.
Generally speaking, agents want a lower marketing price and vendors want a higher marketing price.
The best marketing price to ensure buyer engagement throughout your campaign is the current market price.
In recent years as the market boomed, even overpriced homes were soon correctly priced as prices rose to meet vendors aspirational number. Vendors could get their marketing price wrong and still achieve best selling price.
Now that the market has slowed, vendors risk damaging their campaign if they overprice. Therefore, being pragmatic and understanding current market price, which becomes your marketing price will help deliver you the best selling price.