Virtually every person who decides to sell their property believes that the property is worth much more than what it actually is.
The reason for this is usually because the neighbouring properties have sold for a certain amount or Estate Agents have convinced the owner that the property is worth the inflated amount. The problem with overpricing a property is that it will not sell at the exaggerated price no matter how much advertising or marketing money is thrown at it.
Unfortunately some unscrupulous Estate Agents attempt to win favour with the owner or to obtain a Sole Mandate by inflating the price of the property. Many Estate Agents have a strategy to overprice so that they can get a Sole mandate.
The most common reasons why seller overprice their property are:
1. want to build some ‘bargaining room’ into the asking price,
2. Hope to increase their profit margin as they are moving into a bigger home in a more expensive neighbourhood,
3. Need money too for transfer fees, bond costs, removal fees, new curtains and alterations,
4. Have also spent money renovating their home and expect to recoup their investment
No Purchaser will pay more than what a property is worth. In fact, the only person who really decides what the Property is worth is the eventual purchaser. An overpriced property may remain on the market for an extended number of months.
The potential purchasers are all comparing Properties by going to show houses and by visiting various websites. They know exactly when a Property is overpriced, and not one of them will purchase the property.
Sellers who won't accept that pricing has to be based on what the market will pay, rather than what they want in their pockets, are likely to end up selling for a discounted price a long way down the line - if at all.
But if the price is right, then regardless of any other problems the property has, there will be a buyer for it.If a house is overpriced, and a buyer is willing to pay that price, these are big risks because the house still has to valuated by the bank or professional valuator. Overpriced houses typically valuates for less, and you'll be forced to either lower the price anyway, or put your house back up for sale after the buyer goes to find another house.To avoid this sad tale, it is the duty of a good estate agent to explain to you the pitfalls of overpricing and help you to assess the correct market value. Thinking like a buyer will increase your chances of selling quickly and of actually maximizing your profit. A sensible way to approach pricing is to work with a trusted property advisor to ensure the property is priced just right. As far as possible,
try to remove the emotion from the pricing decision and view it from a purely financial and transactional point of view, which is sure to get the best price in the shortest amount of time.
