Everyone, it seems, is an expert when it comes to pricing property. This includes those mavericks among us who insist that it's their right to market their home at what ever price they choose.
They are absolutely right, no one can force a seller to part with their home for a figure that's lower than the asking price. However, sellers who ignore the advice of a number of different estate agents who are able to back up their valuations with strong evidence may end up sitting with a property that no one is interested in buying.
Hearing that a beloved asset isn't worth half as much as the seller thought isn't an easy pill to swallow, but sadly, it is something that has to be faced and dealt with rationally. It's of no consequence to a buyer what you paid for it or how much has been spent in the way of improvements - they will overlook the home if it is more expensive than other similar homes offering the same sort of features in the area.
Buyers also aren't interested in the fact that the seller is intent on climbing the property ladder. Ling Dobson, PGP area principal in Knysna and Plettenberg Bay concurs: "We often hear, 'I'm upgrading to a larger home and I need my house to sell for 'Rx million' otherwise I won't be able to acquire the property I want."
Every seller is going to want to get the best possible price for his home. However, inflating a price hoping to 'catch' a buyer is unrealistic given that the buyer of today is very aware of not only what is on the market, but also what homes are selling at what price. Property portals list properties according to the suburbs in which they are situated and an overpriced home tends to stick out like a sore thumb.
Sellers also need to be very wary of over-capitalising. Putting solid gold taps, a gourmet kitchen, a sauna and a spa bath into an average middle class home could backfire if the seller tries to recoup these costs when selling - at least in the short term. "Most suburbs have a ceiling price which obviously fluctuates with market conditions," says Laurie Wener, MD for Pam Golding Properties in the Western Cape's Cape Town metro region. "If the costs of building and renovating exceed (the selling price) which can realistically be obtained in the market place, then this is over-capitalisation. However, over-capitalisation can be reduced by capital growth achieved over the time that the property is held."
Buyers aren't guinea pigs and should not be used to 'test' the market. Selling a home is a serious business and should be approached as such. Sellers who try their luck by putting their homes on the market at a higher price with the intention of lowering the amount if no one takes the bait often end up selling for a price that is lower than the amount originally recommended. We all make assumptions and unfortunately in these instances buyers tend to believe that there must be something wrong and therefore shy away from making an offer.
Remember that serious sellers price their homes to sell and as such are able to move on to bigger or better things far more quickly than those who hold out for a higher, unrealistic price.