An opinion piece by Tom Hodgson of In2assets I am often asked by friends and family for my opinion as to why they cannot seem to sell their property and what they can do differently to change that. Without trying to sound blunt, I tactfully inform them that they require a paradigm shift when it comes to property sales and in that regard, I encourage people to understand the importance of an effective marketing campaign and a sales mechanism that drives prices realization and decision making on a stringent timeline.
Below is a summarized response to the above, relatable to all property but I’ll use the example of farm sales as a case point.
The primary mistake any prospective seller makes is disclosing their asking price to the market. Simply put, this is like a track athlete tying both sets of shoelaces together at the beginning of a race and still expecting the desired result at the finish line.
If you’re asking for 10 then a buyer is not going to offer you 11 because you’re such a nice person… And let’s be honest, why wouldn’t you take 11 if you could?
So often sellers are their own worst enemy, and this is frequently seen in the agricultural space where the farm sales cycle follows the same old modus operandi time and time again.
There are various reasons as to why a farmer may decide to sell. Regardless of the reason, the procedure remains the same and it goes something like this - first the farmer will offer the farm to the neighbours, if there is no bite there then the farm is offered to the “strong” farmers in the area, then the farm is offered for sale via word of mouth in the immediate area, then the greater area, and then finally estate agents list the farm on a property portal.
By this stage the property has been over exposed in the marketplace with a big red flag flying a message of undesirability and a perception of a seller whose price expectation is too high.
This may all sound a bit harsh, but it’s the hard truth.
Auctions are a highly functional assets disposal mechanism and when executed properly, the only mechanism that can exceed a seller’s price expectation. There are several core factors that differentiate auctions from other sales methodologies and create the perfect conditions for the pursual of maximum price realisation. However, it is important to note that these key factors simply cannot take effect if the auction process is not considered and implemented first. Here I refer to the protection of the seller’s interests with a nondisclosed reserve price, the marketing campaign, the terms & conditions of sale, and the auction itself to name but a few.
If you are thinking about selling your property, then I would highly recommend exploring the auction process. Engage and understand the process. Rather make an informed decision about why you would not want to go to auction than discarding it completely from the onset and in doing so tying your shoelaces together.
Call In2assets on 0861 444 769 to find out a little more about these core differentiating factors and understand why auction will work for you.
