One of the most crucial decisions you'll make before putting your house on the market is agreeing the pricing strategy with your estate agent. It's vital that your estate agent fully understands your objectives and time scales for selling, in order to set the right price for your home.
While it might be tempting to list your house at a higher price than its perceived worth, doing so can lead to a host of problems that could ultimately hinder your sale.
For most of my properties, you won’t see one price - they might be labeled “OIEO” (offers in excess of) or “Guide Price”. Why? For one, it shows that there is an element of negotiating still available and allows room for a conversation.
And two, although we are aiming to achieve the highest price for my clients, it is equally important to find the best buyer, and the best buyer does not always offer the highest amount, but is one that is ready to conclude a sale.
When it comes to pricing your home, there's a delicate balance between wanting to maximize your profit and ensuring a successful sale.
Overpricing your home , particularly in the current market, can have consequences that far outweigh any potential benefits. Let's delve into some reasons why you shouldn't put your house on the market at a higher price/above market value.
The key thing aspect to remember is that regardless of the type and style of house you are selling, the property is only worth what someone is prepared to pay.
1. Scaring Away Potential Buyers.
The initial price you set for your home plays a significant role in attracting potential buyers. If your house is priced too high, it might deter interested buyers from even considering your property. In today's competitive and challenging market buyers have access to a plethora of information and comparable properties. If your house is priced beyond its perceived value, it's likely that potential buyers will not even look at it, or contact the estate agent for further details.
2. Extended Time on the Market.
Overpricing can lead to your home languishing on the market for extended periods. The longer your property remains unsold, the less appealing it becomes to potential buyers, as they often wonder “what's wrong with it?” This can result in a cycle where you're forced to lower the price drastically to encourage interest, potentially selling for less than you would have if you'd priced it correctly from the start.
3. Reduced Negotiation Power.
When a house is overpriced, it can signal to potential buyers that you're not that keen or motived to sell. Buyers might assume that you're inflexible on the asking price and that attempting to negotiate with you would be a futile effort and for this reason, they don’t even contact the estate agent. This can lead to a lack of interest and missed opportunities for genuine offers.
4. Unrealistic expectations.
Whilst you might think of all the qualities of your home and appreciate any changes you have made, attaching a high value to this will raise the expectations of anyone looking to view. Are they really getting value for that high price? They might wonder why your property is priced so much higher than similar homes in the area, and start looking for what that extra money is providing.
5. Mortgage Valuation Issues.
If you do manage to secure a buyer willing to pay the higher than expected price, you
might encounter problems during the mortgage valuation process. Lenders typically rely on market data to determine the fair market value of a home. If their valuation comes in lower than the agreed-upon price, it could lead to the lender not agreeing to lend the required amount, leading to financing issues and potentially forcing the buyers to pull out.
Ultimately, the key to a successful home sale lies in setting the right price – a price that
accurately reflects the value of your property in the current market.
And in most cases the best person to set this is the estate agent. A local estate agent, that knows the local market and has many years of experience.
Instead of fixating on the highest possible price, focus on getting moved and understanding what your house is truly worth in the context of the current market. This requires a balanced
approach that takes into account both your financial goals and the reality of the property market landscape.
So, while it might be tempting to list your house at a higher price - take on board what your estate agent is saying. Ignoring sound advice can lead to detrimental consequences for your sale. Overpricing can repel potential buyers, prolong your time on the market, and undermine your negotiation power.
I often talk about how it is all about finding the “right” buyer for your home, and that starts
with choosing the right estate agent, that is 100% focused on meeting your goals and
objectives whilst setting the “right” price.
If you’d like to start a conversation about putting your home on the market don’t hesitate to get in touch. Call or message me and book your free valuation and marketing consultation. It's time to get you #MovingOn #MovingForward #MovingHome
Comments