Your home might mean more to you than it does to a potential buyer, so consider these ordinary reasons why you, as a seller, could be tempted to have your home or property on the market at an extra-ordinary, over-priced and unrelated market price; 

1. You want to build some “bargaining room” into your asking price.
2. You may be moving to a more expensive area or larger home and want to increase your profit margin to make the upgrade more financially comfortable.
3. You want to cover the transfer costs (duty, fees, bond costs) involved in the move.
4. You may have spent money on renovations and alterations to the property that you want to recoup.
5. Or lastly, you might be comparing your home to other over-priced properties that have been advertised in your area.

Why is pricing your home correctly from the start so crucial?

The way buyers presently shop for property involves a simple “tried & tested” method we all use in buying anything from a computer to a car. It is a method of comparing homes & the value offered with each other and eliminating those that don’t represent good value. Buyers are discerning and seldom pay more than what they feel is “market related value”. Essentially the only measure of true value is what buyers are willing to pay for similar homes in your area. The first 2 weeks on the market are the most critical. Genuine buyers will immediately notice a new property for sale in the price range and if this new property is priced competitively compared every other they have seen, the sale is secured.

Beware of asking prices:

Homes seldom sell at an advertised price. Many advertised homes that have been over-priced, are withdrawn from the market. Often these are not motivated sellers and they are merely hoping for a uneducated buyer to pay the price, when this does not happen they withdraw the property from the market. These properties are known as expired listings and are withdrawn because the market is not allowing for the price to be achieved.

Don’t start a battle with buyers:

You may find that in the early stages of marketing your home at an unrealistic price that you will be offered aggressively low offers. Buyer rationalise that a ridiculous asking price deserves a ridiculous offer in return. The gap is usually far too big to result in a reasonable compromise between the parties.

It’s a slippery slope from here:

The longer a property stays on the market the more difficult it is to achieve the asking price. As the number of buyers viewing your property declines because buyers eliminate your home from their search, those still interested may bombard you with offers even lower than the true market related value. It now becomes a matter of being on the market too long. Buyers that notice your property being advertised week after week, assume you are now desperate resulting in even lower offers.

The sad outcome:

The outcome of this “overpricing” scenario is a serious strain on the relationship between seller and agent. This often results in the mandate with the original agent coming to end & another agent appointed, this time at the actual market related value. The marketing continues with buyers noticing a price reduction, resulting in further offers and ultimately a frustrated seller selling his home below market related value.

Trust your specialist agent:

Agents who take the interests of their clients to heart, will guide a serious seller to avoid these and other pitfalls. Maximise the potential of a satisfactory transaction by trusting the agent you have wisely chosen. 

Written by: Grant Rea
Tel: 074 401 8840
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