How to undersell a property
I recently came across an article on how Charlie Munger, a long-term business partner of Warren Buffet makes decisions on investing. He focuses heavily on what mathematicians know as “Invert” in Algebra. In an investment context, it means instead of justifying why a particular business is a great investment, one should investigate why it is the opposite. And if they can’t justify the latter, it’s most likely a worthy one.
Let’s apply the same theory to my business. Instead of the conventional way of thinking on how to maximise values for our sellers, let us think of the opposite. Let me show you the best way to UNDERSELL a property:
1) Sell it yourself or find the cheapest agent – since the market is no longer as hot as last year, it is best that you do it yourself or find agents who charge the lowest commission. You save on commission fee and besides, how hard can it be? With the internet and technology, everyone should be able to sell their own homes. It requires absolutely no effort!
2) Photography – Only take photos of your property with smartphones. Let’s not even worry about details like angles or lighting etc. iPhones will do. Don’t worry about decluttering or staging. If the buyers are serious, they will look past that.
3) Marketing – Only advertise on TradeMe as that’s where everyone goes anyway. Or maybe a couple posts on Facebook on top of it. Why bother spending money on print media or other digital channels? A signboard might be a good idea but really not necessary.
4) Open Homes – Viewing by appointment as an open home always attracts nosey neighbours or tyre kickers. When people call, just tell them you don’t need to sell and are not desperate. Unless they are willing to pay a good price, you won’t even bother entertaining a viewing. Let’s not waste their time or yours.
5) Negotiation – To start with, make sure you advertise with an unrealistic asking price to get rid of the bargain hunters. Remember, be UNREALISTIC with your asking price. If anyone shows interest in making an offer, verbal ones will do. Don’t even think about using auction as a method of sale. It’s less stressful and much more effective to price your house at a price you see fit.
6) Dealing with interested parties – In every interaction you have with prospective buyers, show them you are not interested unless they pay the price you advertised. More importantly, don’t show them that you want your house sold! When they asked why your asking price is so high, tell them first and foremost you don’t need to sell and then show them the door. If anyone criticises your kitchen or anything about the house, take it personally and show them the door.
I hope you find the above entertaining. For those of you who are laughing, the reality is that the above does happen more often than you expect. On a serious note, I hope none of you reading this will go through any of these.