"THE LAST BID"
The "One-of-a-Kind" Property
(Am I seeing my property the way the market sees my property?)
The wonderful property that is truly one of a kind and has no comparables in the area can be a marketing dilemma for the ownership. Why? Because it is One Of A Kind! (OOAK). Often the first approach to selling the OOAK by a well-intended owner is to take the same approach that may have been used to sell more conventional property or to offer the property the same way it was purchased.
Usually price tagging OOAK either leads to a "too fast a sale" with a lot of money left on the table or the downward price-tagging spiral begins because all price tags are just really… guesses. (Guess too low/sell too fast. Guess too high/wait).
Once a seller realizes that they have created, assembled, purchased or inherited a now unconventional property (unconventional is not bad at all), the same strategy that was comfortable in the past on other subjects, may lead to an uncomfortable pairing and the seller may spend too much time learning the hard way that "pricing does not create demand, it is demand creates the price". Without the demand (buyers) offering purchase funds, just exactly where is the value? Unfortunately no appraisal, tax and otherwise, or the seller's or real estate agent's opinions offer any purchase funds and………………… therefore any cash value.
If the property is now unconventional compared to other properties in the area due to…
…then the seller may have already learned that the "price and wait" method can leave a lot to be desired in obtaining results.
Should the seller have too much demand, placing a price on the property is an attempt to tell the market "how high is high". Why would any seller want to do that? If you sell too fast you may leave money on the table. Selling too fast (money left on the table) occurs because the strategy to create a competitive bidding environment was not employed.
Usually, the scenario is to price too high and then start lowing the price in hopes of creating demand and then "price tagging" an OOAK can lead to market resistance. Why?
A seller may get a number of inquires about price because that's the first question the market usually asks. Often the market does not want to rush out and agree with the seller's opinion due to the fact there may be few, if any, comparables for them to study. Unfortunately, many sellers are not skilled to know that on an OOAK, price is the last term of sale discussed. In actuality, the bidders need each other to create the "comps" from their own bids at the auction and... the seller needs this environment as well.
Ordinary real estate agents are typically not trained to explain this dynamic to the seller because once they get the listing on OOAK the flow of conversation is usually "let's now lower the price to help create demand". The pricetag usually creates a stalemate thus leading to the seller's lowering of price.
What's the answer? Eliminate price tags.
Affluent market "ready to buy" purchasers are driven by their own greed, ego and the fear that someone else might get there first. Assembling these buyers at one time under the terms the seller has set is the most positive situation a seller can have. It's called an auction and it is upward negotiation! Placing buyers' egos and testosterone in a competitive environment is a seller's dream.
Buyers can bring you their money if they believe they are "coming to purchase". Making buyers feel that are "coming to purchase" is the use of reverse psychology. It's using the greed and fear of the market to create demand. Competitive bidding under the seller's terms, from his crowd of ready, willing and able bidders, is a dynamic situation.
That's why the savviest of sellers avoid pricing the "One of a Kind" and go directly to auction. Doesn't the best of everything from art to horses to antiques to autos to real estate seek a competitive bidding environment… an auction.
Real Estate Auction Company, Residential and Commercial Real Estate, Multi-Parcel Land Auctions