What’s it all about
Monday 23 Mar 2015
It seems ‘the property market’ has become a regular political hot button, wheeled out each election to grab a headline with some silly, short sighted pledge. So here we are with the NSW election, coinciding nicely with an expected record breaking day of auctions, and lo and behold a new promise from the politicians. So what’s it all about?
I do believe that, restricting ‘offers over’ marketing is quite ridiculous, especially right now when demand is so strong. After a slow listing start to the year there is now a good selection of properties on the market and with that increased supply we have also seen more potential buyers enter the market.
It is really hot out there at the moment as is evidenced by recent weekends delivering auction clearance rates above 80%. That isn’t going to change by restricting marketing messages. The potential for properties to sell well above a minimum guide price is going to remain while the market continues to perform so strongly.
Now at this point I should be clear. We do market properties using ‘offers over’ as the price guide mechanism.
In my view it clearly indicates the minimum vendor expectation and a base market value of the property. It gives clear guidance but doesn’t eliminate the potential to achieve a higher price on behalf of vendors if demand for the property is stronger than anticipated.
The alternative I presume is to present a price guide with a minimum and maximum value and then limit offers to within that range. Under that scenario to ensure the best price possible is obtained the maximum value would have to be set at an extreme range thereby rendering the ‘range’ itself virtually worthless.
But ‘offers over’ isn’t a ‘set and forget’ mechanism. If strong demand indicates the number advertised will probably be surpassed then an agent is obligated to adjust the advice and communicate that to all interested parties. Any and every negotiation is always about clear, honest communication to set realistic expectations and minimise the frustration of disappointed buyers.
As I’ve said many times before I see no real value in underquoting but I suppose we will have to wait until election day to see if the general public perceives any value in restricting ‘offers over’. We have 8 auctions scheduled for that day so I may be too busy to notice.