“Listing one of your most precious and valuable assets is a major decision. But as the owner of a property that is about to hit the very perceptive property market, you need to ensure that you have checked all the boxes and done all that you can to enhance the appeal of your property,” so says CEO of Greeff Christie’s International Real Estate Mike Greeff.
Once you have enlisted a trusted and experienced estate agent to sell your property, he or she will guide you along in terms of the listing of your property and how to get it right the first time. This will include devising a marketing plan and approach, determining how much exposure your property requires, assisting you with when and where to list and also, what price to list at. Once you have done all of this, you have one opportunity to make your property’s entrance into the market as effective as possible. Where the matter of pricing your property is concerned, we know that although the agent may advise the property owner to heed their advice, the owner may choose to proceed with their own price and could end up overpricing the property.
With years of training and first-hand experience under their belts, agents better than anyone how overpricing on a client’s property hurts more than it helps. They are the ones who have to spend additional time and resources to get an overpriced property sold. That being said, here are some pitfalls of overpricing your property and how it negatively affects the outcome of the sale.
Lack of buyer activity
Straight off the bat, the last thing a seller wants is a lack of buyer of activity. If the property is overpriced when listed, you could risk losing buyer interest before there has even been proper interaction. Overpricing your property scares off prospective buyers who may be serious about an offer as they will pick up that a property is overvalued for its worth and may end up looking elsewhere. A home in your immediate area could be sold within a matter of days or weeks if it is marketed at the perfect price.
Extends marketing time
One of the tedious and unfortunate side effects of overpricing is when the wrong price causes your property to spend an extended time on market and possibly causing overexposure. Statistics show that the first six weeks of marketing your property are the most important and will be the time period when the most enquiries and interest will be generated. For properties that are priced accurately, this could be a golden window of opportunity and could work to their advantage. However, for properties that are overpriced, combined with a lower level of buyer activity, once this period has passed, it may be a considerable amount of time before any more interest is generated.
Forces price reductions
One of the most bitter pills for sellers to swallow is that sadly, overpricing their property will almost certainly force the seller to reduce their price after a certain time period has elapsed and they have had no successful enquiries. Once this has happened, the agent appointed will price counsel their seller and offer the seller some difficult but honest truths to accept about the having the price of their home reduced. A price reduction should not be seen as a negative though as the positives far outweigh any negatives the seller believes there might be. The reduction in price is set to generate some renewed interest in the property and will almost certainly bring about some interest and enquiries from potential buyers and investors.
As the market moves in cycles and favour of buyers and sellers at various stages, sellers are advised to make the informed decision when it comes to the sale of their property and ensure these pitfalls are avoided altogether.