But the right price is critical. If the price is wrong, you wonât get the sale â even if the other three pieces are a perfect fit. An overpriced property â even if it is advertised on the front page of every major daily newspaper, or placed at the top of every page on every real estate website in the country â wonât sell. There are real dangers in overpricing a property.
Before the internet, properties were mainly promoted via newspaper advertisements, flyers, signs and agentsâ windows. These locations had a remarkable and often overlooked advantage over modern forms of advertising: they left no easily traceable marketing or sales history.
There is an old saying: âNothing is as useless as yesterdayâs newspaperâ. In the newspaper age, a property owner could dip their toe in to test the waters. If they didnât like the result, they would take the property off the market or reduce the price. With no digital footprint, there was very little long-term harm to the property value. The marketplace quickly forgot.
Now, the rules have changed: the internet records everything and forgets nothing.
CoreLogic is the largest supplier of property information in Australia. Major online advertising portal realestate.com.au routinely shares all advertising and known property information with this major data collection company. All property information from these two sites is stored in perpetuity, and is easily accessible.
Before the internet, the only indication a property had been on the market for an extended period was a faded card in a real estate window or a crooked, worn sign in the front yard. Once these were removed, the attempt to sell faded quickly from the marketplaceâs collective memory.
Thatâs no longer the case. The internet creates a digital footprint: a visible record of a propertyâs advertising and pricing history.
SMART TIP
The internet records everything and forgets nothing.
A digital footprint intensifies the danger posed by an extended marketing period. If a property is launched on the main real estate websites at an inflated price and doesnât sell, this can cause significant damage to the propertyâs recorded history â and thus the eventual selling price.
The market price is now partially driven by the digital footprint, and any attempt to beat the market is risky. In the past, it was sometimes possible to âjagâ a buyer at a high price. But this is a dangerous strategy in the digital age, and it can easily backfire and drive down the final selling price by creating an adverse digital footprint.
Many websites provide easy options for buyers to explore information that was previously hidden. On realestate.com.au, one click shows the number of page visits, giving a buyer an early idea of a propertyâs time on the market and desirability. The CoreLogic homepage for agents is one click away from showing all listings that have been advertised for more than 60 days. Agents use this to find owners who may be fed up with their current agent and are ready for a new start at a new price.
This is a powerful resource for the agent, and many property sellers donât realise their every move is being tracked â and those moves are easily accessible to buyers.
The majors are not the only websites offering buyers property information. Countless others offer buyers the chance to find a bargain: oldlistings.com.au, for example, has a complete digital footprint on properties marketed in Australia â for example, a unit for sale in Essendon, Victoria, had nine different marketing campaigns over a 10-month period, with every detail recorded, including its various prices. This is valuable information for a buyer considering buying this property.
Buyers have a wealth of knowledge available at the click of a mouse â and, in negotiation, knowledge is power.
This knowledge helps buyers answer questions such as:
- Has it sold in the past?
- For how much?
- Did it get passed in at auction?
- Why hasnât it sold?
- Why have so many people looked but not bought it?
- Why did it get withdrawn from sale?
Having answers to these questions increases a buyerâs negotiating position.
As Peter OâMalley says in his book Real Estate Uncovered, âAll this public information is forming a âpseudo credit ratingâ for your propertyâ.
Agents encourage owners to increase their digital marketing spend on property websites by pointing out that a premium advertisement â costing thousands â will, compared to a stan-dard advertisement, increase the number of views (for a full explanation see chapter 5).
But increased views donât necessarily mean a better price. As a rule, the more a property is viewed, but not purchased, the more the price drops.
Why is this?
To genuine buyers, an ever-increasing number of views indicates a longer time on the market. Time on the market leads to questions that lead to certain perceptions:
- Why hasnât this sold yet?
- Plenty of people have looked at it. I wonder whatâs wrong?
- Is it the price or is it the house?
The perception of an unwanted property comes from exposure â excessive views are one of the most direct and visible forms of exposure. To a propertyâs price, it is akin to sunburn: the greater the exposure the greater the pain. When selling property, the pain comes in the form of a lower selling price.
SMART TIP
The greater the exposure the greater the pain. When selling property, the pain comes in the form of a lower selling price.
Real estate consumer advocate Neil Jenman used to describe properties that stayed on the market for a long time as âlemonsâ â bitter to the marketplace. As with most things in the digital age, the creation of lemons is now faster and more efficient. Poor advertising strategies now reach more people in a shorter time.
The only strategy for selling a property after it becomes a lemon is a significant reduction in the price, often considerably below where the property would have sold if priced correctly at the beginning of the marketing campaign.
Poor pricing and testing the market at a higher price are no longer feasible strategies because they leave a damaging digital footprint. When you make the decision to sell, the asking price must be close to the market price.
The multiple agent digital footprint
If a seller chooses to use multiple agents, multiple advertising will appear online. Although this may sound like a good way to receive maximum exposure for your property, it is important to consider the digital footprint this will leave.
When bu...
