Why property sellers need to follow the 1% rule

18 Aug 2018

A growing number of Perth's property sellers are wasting thousands of dollars in marketing their homes by not following the traditional 1.0% selling rule...

So what is the 1% rule?

Simple... if your property has a market value of $500,000, then you should expect to spend around $5,000 on marketing, Similarly, if your home has been market valued at $2 million, then your marketing budget should not exceed $20,000.

We're seeing many properties which have a market value of around $2 million, with marketing budgets of $40,000+ yet they are not moving.

Why? The issue isn't the marketing budget, it's the price of the home. In Perth's current market, pricing is everything.

The reality is, overpriced properties will never sell because they are listed for sale well above their market value (and buyers know that), meaning that no amount of marketing can fix that.

The only financial loser in this scenario is the property owner while the financial winner is the real estate agent who has overvalued the property and has obtained free advertising for their services thanks to the sellers money!

So, Perth property sellers - before you commit to a real estate agent and a large advertising budget (which they recommend to sell the property) - determine what percentage of their listings the agent actually sells... Don't look for an agent with 15 listings, look for the one with 5 recently sold properties.

A good agent will be able to price your home correctly from the second they walk into your home. They know the market, they know the value of your home and they should be honest in telling you how it is - even if it's not what you want to hear!

 

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