A Christchurch real estate company is putting price tags on the properties it has for sale because it wants transparency in the industry.
"Let's be honest," says Nathan Najib, managing director of Najib Real Estate. "Real estate agents aren't considered the most trustworthy people. In my years of selling I have found that people want authentic advice.
"They don't want smoke and mirrors, they don't want false hope, they want to know what they are likely to get for their property.
"Having a price guide is fair and brings transparency. There are no underhand deals with potential buyers, everything is in black and white. Price guides make sure everyone is happy with the end result."
Najib started in real estate 16 years ago at the age of 18 and was the top agent in the office he then worked for by the age of 24. Six years ago he founded his own company and ever since has put price guides on every listed property, including those up for auction.
He likens the policy to buying goods from a shop where most items come with a price tag.
"Imagine finding something you want to purchase in a shop, but there's no price on it. Some people might just walk away because they have no idea whether they can afford it or not," he says.
Others, when asked by the retail assistant what they're willing to pay, will feel awkward about having to guess a figure that will be acceptable, or uncomfortable about paying way too much, so they're less likely to buy.
"You would think the shop has gone crazy if they try to sell things that way, but that's what we do most of the time when it comes to selling our biggest asset, our home," says Najib. "It's not a good experience for the buyer and it often doesn't mean the vendor gets the best possible result. Why do it?"
"It's frustrating for buyers otherwise. People are time-poor, they don't want to invest their time in looking into a property in case it turns out to be out of their budget. I know from experience that when you are dealing with frustrated buyers, they are on the back foot, and cautious about spending their money."
Najib says using price guides is also better for vendors because their properties are being seen by potential purchasers who know they can afford to buy the house.
"Our job is to get the best offer we can, and for that to happen we usually need more than one offer on the table. When you price a property realistically and get the buyers in, competition is created and then you have buyers within the same price range fighting for it - and you have the flexibility to negotiate with a range of buyers."
He says a price guide is not set in concrete and on many occasions properties marketed by his firm have sold for above the guide if there's enough competition.
"Some real estate agents argue that by not setting a price guide, you're letting the market determine what it is worth. But if half of interested buyers don't come to the open home because they are not sure what the property will go for, are the offers an accurate reflection of the market?"
He says a good real estate agent should be able to help vendors decide on a price guide by having in-depth knowledge of the market in the area where the home is located, and a grasp of current trends.
"We do thorough research, we see houses that are selling and we can compare them to homes that we are about to list," says Najib. "We can then have a frank conversation with the vendor around what their expectations are, where the home sits in the market and how to get the best possible price for it.
"Unfortunately many agents are lazy. They don't do the research, they say to the owner, 'Let's put your property on the market and see what the market thinks.'
"A decent agent should know within 10 to 15 per cent what a house will sell for."
For more information go to: www.najibrealestate.co.nz