The Playboy pad is up for sale for an incredible $200m even though realtors say it’s worth closer to $60m – $90m. Why does overpricing work against you?
5 myths that lead to overpricing & why they’re not true – for sales and lettings;
I can reduce my price as much as I need to later
Frequent price reductions are a sign of desperation in the market – making your property seem problematic &/or your situation seem desperate – not a good place to be in the property market
People will still view, offer & negotiate
Our culture is one that doesn’t embrace negotiation & offers. Most buyers will simply assume that the sellers opinion is vastly out of kilter with the market & won’t view the house.
Someone out there might pay this price
There might be someone, but more likely, there isn’t. And if there isn’t your house isn’t going to attract the right attention from the rest of the marketplace.
If that someone (see above) offers then the deal is done!
Increasingly, within our economic climate, the banks are rejecting offers made by their clients & dangerously devaluing through lower valuations. The truth is that most large purchases now are the banks, or trusts, decision.
I’ll have just as much interest in a month or two if I lower the price
Ultimately, the most interest in a property comes within the first 30 days of marketing. After that the house has a ‘history’ in the markets & buyers will be hesitant in viewing, let alone in offering.
Overpricing property often leads to;
Longer marketing periods
The house becoming known as a ‘sticker’ or even an unsaleable house
Lower than market price from tougher negotiation due to length on market
Your house will sell the competition – your price will make other houses look great value
Overpricing simply turns away buyers at a more realistic price point
What marketing at a sensible price leads to;
Lots of viewings
Possibly a higher than market value price if not a fair market value price
Keen realtors talking to buyers
Keen purchasers doing all they can to enact the transaction
Purchasers accepting timings & terms from the owners.
Incredulous prices are normally dictated by the owners or submitted by estate agents who want to ensure the instruction.
What to do when pricing your home;
Listen to agents & question them on their valuation
Ask for comparable evidence
Most owners have an understanding of the true value of their own home so listen to what your brain says as well as your heart
Give your agent a period of time to sell the house & then dis-instruct them, or at least add another agent to the mix. Agents know that once they have your house on their books, it’s unlikely that you’ll withdraw it from them.
Written by Ivor Campbell-Davys.
Ibiza, April 2017