Property Motivations - Selling for Profit or Purpose
Is your strategy determined by profit or purpose?
In a buoyant property market, we are bombarded with countless record sale prices as increased buyer demand fuels heavy competition and drives prices upwards. As we have been navigating our way through an upward swinging market over the past two years, it has been simple for agents to assume the motivations of the sellers is central to profit, given they are listing their property at a time where unprecedented prices are being achieved. Without a second thought, we are interpreting that because vendors are listing in such a strong market, they are solely motivated by profit, but what happens now as we have seen a softening in the market? How do we know what the true motivation to sell is when record prices start to settle? While every home is an investment in some capacity and presenting a property to market is certainly about ensuring it is a profitable exercise, however it is possible that sellers, in any market, can be more heavily influenced and motivated by purpose rather than simply profit. As we have seen interest rates rise and a quick cooling of the market, it is time to re-evaluate our approach as agents and consider that we will now see an increase in the emergence of sellers that are motivated to sell due to purpose rather than solely profit.
A seller fuelled by purpose is listing their property in a bid to get from their current situation to the next chapter in their life. Purpose driven sellers can be owner occupiers and investors alike, where their current property sale is a means to an end. It could be an owner occupier desperate to upsize, or downsize, an investor looking to reconfigure their portfolio or a vendor that has experienced a change in lifestyle circumstances that require a shift in housing arrangements, be it family, job or lifestyle changes. These sellers will obviously still be seeking the best possible price for their property in the current market; however, they are more likely to step away without needing to break any street records as these sellers are moving for purpose and considering how the transaction will impact on their next move beyond just financials.
In any market, understanding your seller’s motivation is critical in formulating the best strategy for the successful sale of their property, where you aim to not only meet but exceed their expectations. A seller motivated predominantly by profit may not be as time conscious as a seller whose decision is directed by immediate purpose yet both sellers certainly benefit from the competition and rivalry between buyers that only an auction can attract. Consider a couple going through a messy divorce, they will undoubtedly be more likely to opt for a fast transaction with complete transparency rather than holding out for a new street record. While a profit focused seller will be aiming to achieve record breaking prices rather than a quick sale, yet both sellers will be able to achieve their goals with a targeted auction campaign. The multi-faceted benefits that are derived through the auction process continue to make auction the most effective selling strategy in any market conditions.
A strategy tailored to achieving the highest price, may afford more vendor paid advertising given you are attempting to cast the net as widely as possible to pull buyers from not only local, but interstate and international markets, while presenting the property in its absolute best light. While a strategy set for purpose would appear more targeted on timeline and therefore a sharp auction campaign strategy is imperative to accomplish the desired result in the set timeline.
The beauty of an auction campaign is something we have outlined in the past with our six key auction benefits which include a quick sale, transparency, an unconditional contract, protection through reserve pricing, increased competition, and comprehensive market knowledge. It is these benefits that make auction the perfect vehicle to deliver outcomes based on your sellers’ motivations regardless of what they may be. As an agent your job remains in deeply understanding your sellers’ motivations so you can not only meet but exceed their expectations throughout the process and help them get onto the next chapter with profit and purpose.
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