Research shows that ‘No Price Methods’ of selling your property: Take longer to sell and achieve a lower price.
Wait? What?… But don’t many real estate agents say the opposite?
Yes, they do. According to most mainstream agent websites:
“No Price Marketing increases buyer demand and leads to a higher sale price”.
But does it?
Have you questioned that notion?
At Restate, our clients engage us to maximise their net sale proceeds, so we see it as our duty to question it.
From my close to 30 years experience and research, I’ve discovered that it’s not necessarily true.
Yes, I have seen the likes of ‘Deadline Sales’ achieve a few good results. But I’ve also seen a lot of them backfire.
Rather than focus on the very occasional success story (told to win your listing), wouldn’t it be wiser to look at the bigger picture – the over-all trend?
Regardless of the mainstream industry narrative, I’ve always had doubts about ‘No Price Marketing’. Mainly because of how often buyers say something like this to me:
“If the property doesn’t have a price – we don’t bother looking at it.”
Further, if you are a student of marketing, you’ll know of a guy called David Ogilvy, considered to have been one of the smartest marketing minds of all time. In his book: Ogilvy On Advertising – he puts it this way:
“When the price of your product is left out, people have a way of turning the page.”
I estimate that up to half of the buyers feel this way. But even if only 20% of buyers skip looking at your property… how can my industry say that ‘no-price’ attracts more buyers?
Following, how can we say it gets the best price? Surely one of those buyers (who didn’t look) may have paid more?
And what about some research?
Shouldn’t any advice as to how to best sell your property be evidence-based?
So we completed two studies in our local market.
First, we looked at new listings in a specific price range – comparing the number of online ‘views’ they received.
Yes, many variables determine the popularity of a new listing to the market. But if the claims are correct, we should see increased buyer activity. Right?
Wrong. The results showed the opposite. The properties with the lowest online interest had no asking price. Coincidence?
We then analysed seven months of sales in our market, comparing the final Sale Price achieved to the Rateable Value.*
It’s not ideal research. RV’s are not an overly reliable benchmark, but they’re the only one we have. And with a large enough data set, we should at least see a trend. If as claimed, “no price marketing leads to a better sale price”, we should see it in the numbers.
Here is what we discovered:
Properties marketed without a price: Averaged 95 days on the market and sold for an average of 4% above their Rateable Value.
Properties marketed with an asking price: Averaged only 57 days on the market and sold for an average of 6.5% above their rateable value.
Which suggests, overall:
‘No-Price Marketing’ takes longer to sell for a lower sale price.
You may be wondering: Why then, do so many agents say the opposite? Why are we seeing agents push no-price marketing more and more often?
Simply because Deadline Sales and Auctions have many advantages for Agents – but that’s a topic for another day.
Please Note: I’m not saying you should never use one of the no price methods to sell. There are occasions where it may be a smart move. Check out our Home Sellers Course for more in-depth knowledge on the pros & cons of different selling methods. Or you can request a copy of the book: The Profit Focussed Approach To Selling Your Property
* VERY IMPORTANT TO UNDERSTAND: This does not mean that your property is worth exactly 6% above Rateable Value. This figure is an average from close to 500 transactions. Individual property sales varied from 39% under RV to 62% over RV. So please seek professional advice before making any solid plans around the market value of your property.
P.S. If you are a buyer frustrated with real estate listed without a transparent price – you may find this article helpful: Home Buyers Guide To ‘No-Price Marketing’