I don’t know a lot about fishing but from what I’ve been told by a few of my friends that do, if you’re trying to catch a certain type of fish, you’ll need to use the appropriate bait in order to catch it.

Real estate is honestly no different when you’re searching for the right buyer for your property – if you have the wrong bait, you’ll either catch nothing or at best, catch the wrong kind of fish.

In other words, you need to know what sort of buyer you’re looking for in order to attract them to the property that’s right for them!

In today’s modern digital age, the number of agents that aren’t advertising their properties with some sort of price point is at an all-time high.

We know that many buyers prefer some sort of price indicator when they’re perusing properties online as they don’t want to waste valuable time looking at properties that aren’t remotely in their price range.

What hasn’t changed in many years is that buyers will often exceed their budget by approximately 5-10% and buy a property that’s at the top of their limit…especially now when interest rates are at an all-time historical low.

Last week, I talked a little about the ‘Silent Price’ of a property – the price an agent loads into the back-end of the online real estate portals when they advertise a property with no price.

It frustrates me no end when agents act unethically by loading a ‘silent price’ that is a long way away from what the sellers are looking to achieve.

As I mentioned in my blog last week, it is highly illegal for an agent to advertise a property with a silent price that is more than 10% from what the owners are looking to achieve…but many still do it as it can be a hard practice to police.

Last week, I appraised a home for a price that I believed should have achieved somewhere around the mid $500’s.

They spoke with another agent (that was a little more ‘local’ than I was) who wouldn’t offer much in the way of a price expectation.

Based on the fact that this agent was ‘local’, the seller listed their home with this agency.

Surprisingly, the owners contacted me and asked me to give them some feedback on the online listing once it became live but this was something I didn’t mind doing for them.

Other than the fact that I would have had photos taken upon dusk rather than during the day, I thought that the listing looked pretty good all except for one thing – the advertised price was “All Offers Invited” and when I played with the price parameters online, I found that the ‘Silent Price’ was only $450,000!

I asked the owners what they wanted to achieve and they told me that they wanted a figure around my appraisal price so probably something close to the mid $500’s.

I told the owner that he needed to change the ‘Silent Price’ quickly or they would be attracting buyers in the mid $400’s (many of these will end up spending high $400’s) but he assured me that the agent knew what he was doing.

Needless to say, the first few days were busy with 14 groups of buyers through at the first open home…and 4 offers submitted.

The Offers ranged from $435,000 right up to $480,000 (with an average around $460,000)… a fact that wasn’t surprising to me at all.

The agent managed to negotiate one of these to buyers to $500,000 and gave them advice that they should accept this offer based upon the fact that “the market had spoken and “most buyers can only see value in the mid to high $400’s for your property”.

After only 4 days on the market, the owners succumbed to the pressure of the agent and signed the offer at $500,000.

Quite simply, the wrong ‘bait’ was used to catch the right fish… a fish that should have been at least in the ‘low-to-mid’ $500’s range.

In my opinion, the agent left at least $30,000 – $50,000 on the table for the buyers…and what fascinates me is that the owners believe that our appraisal of $540,000 – $550,000 was more than what their property is worth based upon the ‘market feedback’ … so their opinion is that we tried to ‘buy’ the listing when our report clearly contained a comprehensive analysis of similar properties that have recently sold for prices around the mid $500’s.

So to use another analogy, I’m wondering whether ‘the dog is wagging the tail’ rather than ‘the tail wagging the dog’.

What frustrates me is that their property will settle and they’ll be none-the-wiser!

It’s examples like this that show how much influence an agent can have on the outcome and how many sellers don’t even know they’ve been fleeced.

My message today – if you want the best price for your property, make sure you’re targeting the right buyers otherwise you’ll sell for a figure that’s well-below what you could have achieved…and secondly, if you’ve chosen to list your property with no price, you MUST know the ‘Silent Price’ and have had a discussion with the agent about the correct price to use.

Until next week…Happy Listing & Happy Selling!