Houses advertised without asking prices are an instant turn-off

by Chris Lang on April 10, 2012

Annoyed home buyer

Have you spotted this trend lately? A new listing comes up on realestate.com.au, with pictures and everything, a nice description, just one thing is missing – the asking price.

“Perhaps the real estate agent forgot to update this small – but important – detail”, you’re saying to yourself. Or do you attribute this to the agent’s negligence?

Well – the truth is that neither bad memory nor negligence is the reason – it’s their new strategy.

In the period of falling prices the vendors are not confident about their asking price any more. In the good old times they would have aimed for the stars to reach the sky. But now, they are afraid to even let the buyers know how much they want for the house, because the prices have dropped – but they don’t know how big the drop was. This is why the vendors are now asking the buyers – “How much will you pay for my house?”, instead of setting the price in advance.

Agents call this “getting an indication from the market”. Here is how it works – they advertise a house without the asking price. At the open for inspection they get a name and a phone number of anyone who shows up. Then they ring these potential buyers and ask what they thought about the property and how much they would pay for it. And that’s the input that goes into the price-setting process. Based on the numbers the buyers quote the price of the house will be set.

What if you were to call and ask the agent about the asking price before the inspection day? You would hear in response “We are still waiting for the indication from the market”.

I’ve always found that tactic irritating, not to say dishonest, and now it turns out I’m not alone. According to the research by PRD Nationwide done in March 2012, the vast majority of house hunters – a whooping 75% – are saying they are greatly deterred by a property on the market if it doesn’t have an asking price. Another 20% are slightly deterred, and only 5% are either not deterred or not sure how they feel about it.

So in light of these latest findings it seems that sellers are doing themselves a disservice by hiding the asking price.

Have you seen a house listing that keeps the asking price a secret? How did you feel about it?

{ 7 comments… read them below or add one }

Colleen DuBois April 10, 2012 at 9:16 pm

Great article! …Agents who use these tactics are simply not skilled negotiators. If they were, they wouldn’t use such a financially damaging strategy. You are absolutely correct in explaining that when you hide the price, the buyers go into hiding too. The “no price” or ‘POA’ strategy makes the home instantly appear as if it is over-priced. There ensues a terrible risk in turning off the most genuine buyers…all that lost enquiry could be your BEST enquiry! A skilled and professional agent will take the time to research comparable sales in your area, market the home at a fair market price, explain it may take a little time to find the right buyer and promise the seller that the highest price will be negotiated on the day. It shouldn’t be that hard…and it isn’t!

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Chris April 10, 2012 at 9:51 pm

Thanks Colleen – and a very good point about the house without an asking price being perceived as overpriced!

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Colleen DuBois April 11, 2012 at 10:17 pm

Chris I agree so much with your article I would love to re-blog it and share with my readers. Would that be ok with you ?

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Chris April 11, 2012 at 11:23 pm

Absolutely, Colleen, just please acknowledge http://www.Homeiown.com as the source.
Cheers!
Chris.

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Sue Boyle April 19, 2012 at 1:38 am

Good point. I know I just ignore houses that are not priced. The idea that this would induce me to call for it is bogus.

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Stephanie April 22, 2012 at 12:02 pm

Wow thanks for the article Chris. I thought I was the only potential buyer who got turned off by the non-existence of asking price, but actually the majority of people are too. If the property ad had “POA / Contact Agent” or the like without any indication of price, I did NOT contact the agent. Agree with Colleen, POA gives the impression that the vendor’s expectation is too high so why bother asking. Also it seems like the agent has no idea how much the property is worth, therefore the agent comes across as lazy and/or incompetent.

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Bek July 2, 2012 at 10:20 am

I just close down any window or link where there was no price, any seller that has this as a ‘tactic’ should rethink the skill of their agent, it makes you look like you are dodgy or indecisive, either way I then wonder what your house is hiding too…

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