Disclaimer: This information is intended to be of a general nature. Please do not rely on any of the content as being a professional tax or legal opinion and seek your own independent advice.
“Stocktake Sales, End of Financial Year Sales, Door-buster Sales” – in an effort to attract customers and by extension more sales, retailers hold and promote the fact that their wares are available for purchase at a discounted rate.
Similarly, real estate agents, in the promotion of their clients’ homes also offer property at a “sale” price. Given property is mostly offered “for sale”, semantics spoil the opportunity to use retail promotional vernacular, although agents instead use enticing language in property promotion. “Must be sold”, “reduced to sell”, “below replacement”, “bargain buy” are frequently used examples.
Price too and the manner in which it is expressed is a useful “on sale” enticement. Price ranges, price “plus”, “above” and “from” a declared price are examples. Sellers (and therefore their agents) are obliged to ensure the expression of the asking price is not deceptive; a property cannot be advertised at say “$650,000 – $700,000” if the owner intends to not entertain acceptance of an offer at $650,000. It could be that methods other than price ranges may also fall foul of the Australian Consumer Law and other legislation.
In the current market, agents have been pushing the boundaries by advertising a “from” price well below market expectation in order to attract offers and competition amongst buyers. Whilst agents should consider alternate ways to attract buyers in how a property price is advertised, they should also be cognisant of adverse buyer reaction to perception of such prices giving false hope of a bargain.
Increasingly common is “Expressions of Interest (EOI)”, “Price on Application (POA)” or no price at all, encouraging buyers to “Call for Details”. Whilst a worthwhile strategy in many cases, plenty of buyers like to shop by price first and location second and during times where listings are plentiful and demand soft, the efficacy of a “no price strategy” is questionable. Mostly, buyers crave ease when searching for property and are seeking as much information as possible when considering a property purchase. Buyers may, therefore, simply move onto the next listed property that displays a price, address and the next available viewing time.
That being said, some properties are either difficult to accurately price or offer something extraordinary that may engender a higher than expected outcome. In these circumstances, a “no-price” strategy is entirely appropriate and can deliver the best result.
By Hayden Groves
REIA Deputy President