Price FAQ
What's wrong with a simple fixed price?
There's nothing wrong with a fixed price, but it becomes a problem in terms of
negotiating. What happens if two or more purchasers offer to pay the fixed price? Is the first
purchaser entitled to complain if the property is sold for a higher price, when the first purchaser was not given an opportunity to
better the second offer? Numerous other problems arise - purchasers often assume that the fixed price has been falsely inflated to absorb under-offers, and vendors who set a fixed
price often do so on a "see what happens" basis. In real estate the fixed price tends to create more issues and difficulties than it solves.
What's the difference between "offers over" and the "price plus" approach?
The short answer is that "
offers over method
" is fair and open, while the "price plus" method is designed to mislead. "
offers over method
" means that the
current market value
of the property
has been determined by an independent valuer, and the vendor is inviting purchasers to make offers over the
valuation
figure.
The "price plus" figure is one invented by the
estate agent
, with no sound basis whatsoever. It can be manipulated by the
estate agent
as against the vendor or the purchaser because it has
no sound basis. It's a bit like the schoolyard trick of having children make mental calculations on an unknown number which becomes irrelevant when the trickster says, "Now take away the number you first started with."
Buyer ranges and similar devices have a similar function, and have been banned in the Northern Territory as deceptive.
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