Every property seller wants to get the most for their property – and you’re absolutely entitled to it. The problem is that, when your “wish price” exceeds the market value, you may be tempted to list way above a price that will attract buyers.
Sadly, some estate agents will advise a seller to start high – saying that you can always drop later. Whilst that’s true, when you start much above market value you simply chase the right buyers away. As the months pass your property becomes stigmatized.
Buyers usually ask an agent how long a property has been on the market for. It’s a proven fact that, when a buyer realizes your property has been listed for a while, they draw the conclusion that there is something wrong with the property, or that it’s overpriced. The possibility of a buyer offering you their maximum is almost zero.
However, if you take the market feedback into consideration and price correctly you will attract buyer interest. And that’s what you want – strong buyer interest. In a recent case in our business one of our sellers wanted to start about 12% above market value. Over the two months that followed there were over 40 viewings, and over 150 website views – but no offers.
The evidence showed that the marketing was working, but that buyers were resisting the price. We recommended to the seller that the price be reduced to our initial appraisal value, and in line with buyer feedback.
Many sellers mistakenly think that, if they are correctly priced, a buyer will only offer less than the list price. Whilst it’s true a buyer may start low, they will go up to their maximum when they compete with other buyers.
In the case mentioned above, within 4 days of the price change we had 2 offers, and because the buyers were competing against each other, they put their best offers in. The result was a sale above the list price – and all because the list price was correct.
So, if you have a property that isn’t selling, and provided you are receiving strong marketing in print and online, it may well be that your list price is wrong. Your agent should be giving you honest market feedback. If they’re not, then get a professional opinion.
When it comes to opinions on price, don’t trust the “gut feel” from an estate agent or anyone else. Work only on the facts. You’re entitled to a comparative market analysis where your property is compared to other similar properties that have recently sold – within the last 6 months.
When you take these facts into consideration, and you evaluate other competing properties that are currently listed, you will get an accurate indication as to what your current market value really is. Don’t ignore the facts. When you overprice you sell for less than market value – the facts prove this.
So list correctly and sell for the most the market will pay.
Principal, Harcourts Platinum
Director, Harcourts South Africa