No Price Is As Good As An Auction
I heard an agent say recently that advertising a listing without a price is as good as an auction campaign. Their theory was that you ran a strong campaign, withholding the price and allow the market to interpret their own price and generate competition between interested buyers, just as an auction campaign would. Unfortunately this concept couldn’t be further from the truth. A private treaty listing without any price indicator is as good as a silent listing that is not being marketed at all. Research shows that over 66% of buyers will simply ignore a property without an advertised price (excluding an auction listing).
In this industry, we see all sorts of techniques that avoid displaying a price, whether it be ‘Make an Offer’, ‘Price Negotiable’ or ‘Please Contact Agent’. For buyers this would have to be one of the most frustrating parts of searching for a property as they have no way to evaluate whether the property falls within their budget or not. Hiding the price also does no favours for the agent, with studies showing properties listed without a price experienced longer days on market and fewer enquiries.
An auction campaign doesn’t display a price yet it runs to a distinct time frame. Buyers not eligible to bid under auction conditions can wait to see if the property is available and present their offer immediately following the auction. While buyers that can bid are put in a position where they publicly and openly compete with other interested buyers and this ultimately dictates the price. There is a deadline, urgency, competition and ultimately the best price wins. You do not get the same conditions from a private treaty sale without a price. Instead you deter over half the prospective market, you frustrate potential buyers and ensure the listing sits on the market for a longer duration.
My advice, if you want to withhold the price, run an auction – get the market in a frenzy over the property and drive the price upwards through competition. If you are listing as a private treaty, price it right, make the listing approachable and relevant to your target market and generate the higher prices through quality negotiation techniques.