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HOW well does the adage, ‘if you have to ask the price, you can’t afford it’, ring true in today’s real estate market?

Pricing is a hot topic in real estate at the best of times, whether it’s record prices, hot auctions or accusations of underquoting.

It all turns the spotlight on how best to convey the seller’s price to the market.

Most agents are upfront, listing a property with a quoted price or range, even for auction campaigns.

But there’s a solid percentage of properties that are listed without a price. Many agents instead ask for expressions of interest or provide a price only on request.

Deakin University Professor Richard Reed said price strategy differed depending on the price bracket and whether market conditions favoured buyers or sellers.

‘The interesting thing is if it doesn’t have a price, the seller is in control,’ Prof Reed said.

‘A bit like an auction, they’ve got all the cards up their sleeve.

‘If the price is quoted, the buyer is more in control. They know they can negotiate down and they know the top end.’

Prof Reed said prestige homes tended to be listed without a quoted price, while the price was revealed to the lower brackets where buyers were more price-conscious.

‘If it’s a seller’s market, where demand exceeds supply, the sellers are more in control and they can dictate what the deal is going to be and they will have multiple people to negotiate with,’ he said.

‘Having said that, many buyers won’t be interested if there’s no price. I guess there’s an old adage in retail, if you’ve got to ask the price, you can’t afford it.’

Prof Reed said knowledgeable buyers would know what a property was worth, even if a price wasn’t quoted, because research would tell them prices achieved for similar properties.

But he said leaving the price out added to the inefficiency in the real estate market.

‘If all the properties didn’t have their prices listed, buyers would actually have to go and do a little more research and it would create a lot more uncertainty in the marketplace,’ Prof Reed said.

‘The upside is they might get a higher sale price, but the downside is it will very much limit the number of interested buyers.’

Harcourts Victorian chief executive Sadhana Smiles said while it could be difficult to quote a price for an auction campaign, the risk with not pricing a home in a private treaty sale was the consumer would make their own assumptions and disregard properties they believed were out of their price range.


Posted by Peter Farago – Herald Sun on 11th April, 2015