Marketing represents exposure to the most buyers. Exposing a poor price to buyers may turn them off, and when the price is lowered, buyer's may ask."What's wrong with the property?"
Paul says: "my goal is to help my clients see past the dirty, dated, worn and cluttered. It is also my goal to help clients see through the polished, staged and painted. Making rational comparisons between multiple houses, playing Devilâ€™s Advocate, pointing out pros and cons." I agree 100%. The only problem is that lots of buyers are unable to do that, even with professional assistance. Think back on the buyers you've had who've absolutely and immediately rejected a house because the kitchen didn't have granite countertops and stainless steel appliances. Or the buyers who've fallen in love with a poorly done rehab BECAUSE it had granite countertops and stainless steel appliances.
There's the cliche: "You can lead a horse to water, but you can't make it drink."
For the purpose of the original question about marketing compensating for a high list price, it depends on what you define as "marketing." My instinctive answer, of course, is "no." But if you define marketing as a combination of skilled staging plus some attractive bells and whistles (the granite countertop/stainless steel appliance thing again), then my response is a lot more nuanced.
And--random thought here--what's priced "well above the market" may not be overpriced for particular buyers. For instance, I knew some people who wanted to move their elderly parent in with them. So they were looking for a home with a good-sized bedroom on the first floor, along with a full bath. There weren't many to choose from, and I suspect that they overpaid, based simply on "the market." Most people don't assign much value to a full bath and bedroom on the main floor. But those buyers did. They didn't care about "THE market." They cared about a house that worked for them. As for how marketing enters into such a situation, "superior marketing" would involve promoting the unique benefits of that property to an audience (perhaps baby boomers with aging parents) that would value the difference.
Another example: Parents with a child with autism. Perhaps a particular school has a great program for kids with autism; nearby schools don't. I can almost guarantee that those parents would be willing to pay a lot more for the same property (in the school boundaries of the school with the autism program) than parents without a kid with autism would. So the market (99% of parents without a child with autism, plus people without kids in elementary school) would place one price--the market price--on the property. The parents of a kid with autism could well place a higher value on the same property. Superior marketing: Simply making sure that the various support groups and organizations who help parents with autism are aware of a property in that particular school's boundaries.
So I'd answer the question about marketing compensating for a high list price as: Usually not. Sometimes yes.
Hope that helps.
My view is the pricing and the marketing go hand-in-hand. A well-priced home with excellent marketing will ultimately serve the seller best from a financial and time on market standpoint. The contract price is likely to be higher and the days on market lower (in this market, lost time is lost money).
Have a great day!
Marketing is superior if it increases demand. Pocket listings don't sell quickly because they are barely marketed and little demand is generated. If you can increase demand, then you will sell for a higher price.
The question I've been searching for an answer to is, what kind of marketing increases demand!
Unfortunately LISTING PRICE is what Buyer's SEE>
They ascribe an importance to it.
Sellers do to:
Understand that the LISTING PRICE has one primary objective, to attract attention: It is not intended to be set in stone, and in many cases it is not even a good guideline toward the SELLING PRICE.
Some Sellers believe that by setting the LISTING PRICE high, they can always come down, and people will make an offer anyway: WRONG! Buyers will just bypass the property and look at houses that are within their price range. And six months from now, the Seller will slowly start lowering the PRICE, (this is called â€œchasing the curveâ€) and Buyers will be asking the question; â€œWhatâ€™s wrong with that house?â€ and â€œWhy has it been on the Market so long?â€
Other Sellers set the LISTING PRICE low, to attract multiple offers. (The correct strategy.) We are asked; â€œArenâ€™t you obligated to sell at this price if someone offers it?â€ The answer is probably not; for that to happen, you would first have to have only one offer, and secondly, the offer would have be exactly the same, down to the smallest detail, (please discuss this with your Realtor).
Another thought; Buyer will search for potential properties by groups; for example, $400,000 to $450,000, and $250,000 to $300,000. If your house is priced at $460,000 or $310,000, the Buyers will never see it. (something else to discuss with your Agent.)
We have found that extremely often, the LISTING PRICE that is set on SHORTSALES and REOâ€™s are not determined, nor even discussed with the Bank: The banks play their cards very close to the vest, they will not tell the Listing Agents any more than they have to; they will not give us their lower limits. So usually, the LISTING PRICE on a distressed property is a number taken out of the air.
If you are considering a property, have a Realtor do a CMA, (Comparative Market Analysis) to help you determine your Offering Price. If you look at enough CMAâ€™s, you will see the trends.
As a Buyerâ€™s Agent, my goal is to help my clients see past the dirty, dated, worn and cluttered. It is also my goal to help clients see through the polished, staged and painted. Making rational comparisons between multiple houses, playing Devilâ€™s Advocate, pointing out pros and cons. If the decision were clear & simple, I would be unemployed.
Superior marketing will get people in the door. Superior pricing will get the house sold. Superior representation will help my Buyers determine which is the best house for them with the best possible terms, regardless of the online pictures, open houses, broker opens, staging, color brochures, booties, yard signs, virtual tours and digital signatures.
Superior marketing attracts more eyes.
Such homes are depending of a buyers agent able to advise the buyer, "Nobody pays 'suggested retail price."
Then there's that tricky thing about the appraisal..
Exception: if the home is famous, infamous, has a history or possess the one-of-a-kind attribute that the one-and-only buyer simply must have. (i.e. Floor tile mosiac of the Grand Canyon)
Would you show an overpriced home (a home where community values indicate the home is within your buyers price point) to your client? Would you encourage your buyer to submit a purchase offer 20, 25, 30% below listed price? See my blog below.
I see far too many realtors taking over priced listings, and I am guilty as well. I have, from time to time, taken them in hopes of picking up buyer leads, or after having said to the seller, "Look, my job is to get you the most money possible for your home, but the market sets the value, not me. We'll try it at this price, but, if we market the home aggressively, with my 'superior marketing plan' and we still get little or no activity, and no offers, then we are going to need to lower the price." If they will agree, up front, to that, then on occasion I will take the listing anyway. But I will add, with mixed results. Most of the time it is a waste of MY time and time is money!