Should I discount the price of my home?

When it comes to pricing your home for sale it is the art of finding a balance.

Pricing your home too low will provide value for potential buyers which is likely to result in a speedy sale, but the vendor could walk away with a sum below the true market value.

Listing your home with a value higher than the market dictates could turn prospective buyers away. The home could linger on the market with little or no buyer interest. A stigma can be created around homes that have been on the market for a long time. Buyers start to question why the home hasn’t sold. Vendors who find themselves in this situation will often be led down the path of discounting in order to secure a sale.

Discounting tends to become prevalent when market conditions begin to soften. Vendors miss read the changing market and list their home expecting boom-time pricing, only to subsequently have to re-adjust their price expectation to meet the market.

Homes listed with a price out of whack to the market may need to be adjustment – irrespective of the stage in the property cycle. It is crucial to understand the factors that influence the price point of your home and, get the asking price right from the start.

Vendor discounting is the percentage between the original asking price and the end sale price of homes sold by private treaty. Despite the fact Canberra’s house market is a buoyant one, there are some vendors who have offered discounts in order to achieve a sale. Even under strong market conditions it highlights the importance of setting a realistic price no matter the market, or consider sending the home to auction.

Vendors in the Inner South eventually sold with the heftiest discounts, with houses sold by private treaty attracting an average discount of 7.21 per cent and units 5.07 per cent. Units in Woden Valley matched the average discounts experienced in the Inner South.

Buyers found substantial discounts in Weston Creek, Woden Valley, and the Inner North with houses selling 5.83 per cent, 5.24 per cent and 4.97 per cent below the listed price.

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A true asking figure will encourage a timely sale. Vendors listed with more realistic price expectations in Gungahlin, Belconnen and Tuggeranong, with the average discount for houses sold by private treaty at 4.5 per cent, 4.06 per cent and 3.6 per cent respectively.

All regions experienced vendor discounting but at a varied degree. Units in Belconnen were discounted by 5.03 per cent, in the Inner North by 4.93 per cent, Tuggeranong by 4.16 per cent, Gungahlin by 3.32 per cent and Weston Creek by 3.16 per cent.

Vendors looking to avoid discounting should conduct their due diligence to understand the current market dynamics to give a clear indication of price, as well as seeking advice from industry professionals. Buyers seeking a discount could always try their luck with an offer.

Figures are based on sales over 12-months to the end of January 2018