When selling a home, many different marketing strategies can be used to generate interest among potential buyers.
One strategy, no price house marketing (NPH), has become increasingly popular in the real estate industry due to its benefits for both sellers and buyers.
NPH allows sellers to have more control when pricing their properties and by not listing a price allows them to potentially receive interested offers that are above market value.
For buyers, NPH helps foster healthy conversations between themselves and the seller’s agent throughout the negotiation process while avoiding signing away too much money on an overvalued property they might regret later down the line.
In this blog post, we’ll take a closer look at what exactly no house price marketing is and discuss how it provides meaningful advantages for all parties involved during any real estate transaction!
What Is No Price House Marketing
No price house marketing is an approach to selling a home that removes the set asking price from the listing and instead relies on conversations between agents and potential buyers to identify a mutually agreeable figure.
This strategy encourages more dialogue throughout the process and allows sellers to focus on factors like the condition of the property, neighbourhood desirability, and features of the house rather than just relying on a low-price tag to attract attention.
Additionally, NPH helps buyers by avoiding properties that might be overvalued and allows them to enter into negotiations with more confidence knowing that they won’t be paying too much for their dream home.
When would you not put a price on a property?
There are times within a property cycle when prices are dramatically increasing and it’s extremely difficult for both sellers and their agents to accurately put a fair market price on a property.
In these conditions, it’s best left to the market forces to determine what a buyer will pay to acquire the property.
There are also certain types of property selling methods that do not display a price.
Auctions
Often attract buyers by not displaying a price but rather attracting them with the promise of a potentially attractive deal.
Expressions of Interest
This method is popular when selling higher-end properties that often attract a wide range of buyers. Expressions of Interest (EOI) will avoid buyers from overbidding on the property and allow the seller to gauge what potential buyers are willing to pay for their home. Properties marketed this way usually are advertised as: ‘For Sale’ or ‘By Negotiation’.
Is No Price Marketing Deceptive Or Misleading?
Some people will think this type of marketing is deceptive as it’s trying to lure more people to consider a particular property for sale.
But it is legal.
An agent is given the task to market a seller’s property to the widest audience possible. In doing so, the agent gives a potential buyer the option to place a property on their shopping list within a preferred price range; there is no inducement to buy the property.
Agents have strict guidelines to adhere to when listing no-price properties.
Attracting Buyers To A Property Where There Is No Price
So, if there is no price on a property how does a buyer know what price the seller is trying to achieve? There must be a price guide somewhere for a buyer to go by.
What is a price guide, how is it determined and who creates it?
REA and Domain are the dominating real estate portals for people searching for a property to buy.
On these portals, buyers enter their search criteria around whether they are looking for a house or apartment, the number of bedrooms they desire, their price range and the preferred area they want to live or invest in.
The portals then present properties to view which match the buyer’s criteria.
But sometimes there is no price on the property for the reasons outlined above. In other words, the price guide is hidden from the public. In this case, only the seller and agent know what that price guide is. How does the property appear in the search criteria?
What’s the difference between a ‘price guide’ and a ‘hidden price guide’?
An advertised ‘price guide’ is when the real estate agents or sellers advertise their property listing to give potential buyers an idea of what they’re looking for.Â
Typical way properties are advertised with a price guide could be a range, such as ‘$750,000 – $800,000’, or simply the words ‘Offers over $750,000’. The purpose of the publicly available price guide is to give buyers a good indication of what the seller expects to receive for the property without having an exact figure.
This allows potential buyers to make an informed decision on whether or not they are interested attending an open home and making an offer within that range. The downside with this approach is a buyer may rule out a property simply because of the price guide before they even step inside the property.
Properties marketed with a ‘hidden price guide’ are usually advertised as ‘For Sale’ or ‘By Negotiation’. In this case the price guided is hidden from buyers. The agent supplies a hidden price guide to the portals so that the property will be correctly positioned in search results. Â
This hidden price guide is also referred to in the real estate industry as the ‘match price’ or ‘search price’ or ‘backend price’.
A hidden price guide encourages buyers to inspect the property first before making any decisions on what they think it’s worth.
Who creates the price guide?
The price guide is created by the selling agent and the seller based on their knowledge of the local market. The agent will have conducted comparable sales and researched similar properties before offering a price guide to potential buyers.
It’s important to note that the price guide should be realistic and in line with current local market conditions, as buyers may get discouraged if the expectations of the seller are too high.
Typically, the agent when uploading the property onto a portal has the discretion to list the property without a price using a hidden price guide but usually within a 5 – 10% window of what the seller is trying to achieve and to current research.
The Advantages of No Price House Marketing
No price house marketing offers both sellers and buyers a variety of benefits, including:
For Sellers:Â
- Increased control over the sale of their home
- Higher attendance at open homes
- More competition amongst buyers as people physically see more people during the open times
- More meaningful conversations with interested parties
- Buyers not being turned off by an advertised price guide
- Buyers falling in love with the property before a price is even discussed
- Higher potential for selling at or above market value
For Buyers:Â
- Increased confidence in the negotiation process
- More scope of properties to view
- Making sure the property is a good fit before negotiating on price
- No fear of paying too much for a property
- Improved ability to identify potential properties albeit some may be slightly outside their preferred price cap. Most people can find a few extra dollars for that dream home
Conclusion
Ultimately, no price house marketing helps both sellers and buyers come away from any real estate transaction feeling satisfied with their experience and having achieved their desired outcome.
With this approach, everyone involved in the process gets a fair deal and can walk away with an increased sense of confidence.
