Property: Common sales tactic backfires - research

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A common house sales tactic used to lure buyers is causing longer sales cycles and more misery for homeowners, research by realestate.co.nz suggests.

Realestate.co.nz chief executive Alistair Helm said a property receives four times as many views in the first five days of it being marketed online than one week later, meaning the common sales technique of setting a higher asking price initially and negotiating later could prove costly for homeowners.

Helm said the analysis of 1100 New Zealand properties across a six week period during July and August was based on similar research carried out in the States, and was crucial given the current market.

"Clearly the level of sales in New Zealand over the last two years has been very low - almost to the extent that there must be people out there who want to move, who need to move and just can't find a buyer."

"The problem is if you pitch at a price and have to adjust later, you really have missed the opportunity because the buying public has ignored your property because of what you said you thought it was going to be sold for."

The realestate.co.nz research shows a new listing exhausts more than a quarter of its total viewing audience within its first week, when looking at that listing across an eight week period.

Massey University property group Professor Bob Hargreaves said the results were telling.

"When we were going through the property boom things were going up so fast, people had sellers' remorse in a way where they thought if we'd asked more we probably would have got it."

"At the moment, unless you have a realistic price on your property you are not going to sell it."

Helm said email alerts could be a powerful tool when selling a home.

"These are really hitting the most important people in the market, who are actively taking the time to search every morning. This is your classic core target audience. That's why hitting the right target on day one, with the right price and presentation is so critical."

Helm acknowledged knowing the right price asking price could be difficult in the current market, but said there were plenty of tools that could assist, including property reports and speaking to real estate agents about recent sales in the area.

He said the research reinforced what real estate agents had always been told - that first impressions counted in terms of a home's presentation.

"We're just turning that around to the sellers now in terms of price and saying if you are not biting the cherry on day one you are missing a great opportunity."