18 Sep 2015
Pitfalls of Overpricing a Property

Pitfalls of Overpricing a Property

Pitfalls of Overpricing a Property
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Guid,Tips,Selling,Auction real estate agents

Ask any agent why a house doesn’t sell and they will tell you it usually comes down to price. Almost any property, anywhere will sell if the price is right. A good agent knows how to balance that fine line between achieving the best price possible and having the property languish on the market because it’s overpriced.  

The lure of tax-free profits on the sale of an owner-occupied home is often too much and sellers will list their property well above market rates. Many owners take the view that they can start high and reduce the price after a month or so if they haven’t had any ‘bites’. Unfortunately many sellers don’t realise that this strategy is rarely ever successful. 

The best window of opportunity to sell a property is in the first 30 days. Prospective buyers will check out a new listing online and decide if they will go to the home open. If a buyer thinks the home is overpriced, they won’t attend the home open. They may also use the over-priced property as confirmation that another property is a far better buy and attend that home open and potentially purchase. 

With few people at a home open, potential buyers know there is little competition to purchase and won’t be as motivated to put in an offer. When buyers are keen on a property and are viewing with several other groups, there is the motivation to put in an offer first and beat another keen buyer. That buzz at home opens is not seen after the first month on the market and the opportunity of being a hot new listing is lost. 

Potential buyers often ask how long a property has been on the market for. And the greater the number of days the more motivated they think the seller will be to accept a low offer. The buyer may make also not be prepared to negotiate thinking the seller will be desperate enough to come down to their price.

Even if the seller manages to snare a buyer who has fallen in love with the property and is willing to pay an over-inflated price their lender may act a little more level-headed. Gone are the days that lenders hand out what their clients are willing to pay for a property. Lenders simply don’t like financing properties that are above market price and won’t hesitate to knock back an application.    

Taking a ‘wait and see approach’ works for some things in life but real estate isn’t one of them. If you’re looking to sell your property ask your real estate agent to show you examples of similar properties, their selling price and the number of days they were on the market. You’ll see that those properties listed at market price sold quicker and often for a higher price than those whose owners took the approach of listing high and dropping the price later. 

Thinking of selling? At Naked, we believe in being 100% transparent with the sale of your home, which is why we have developed our best price guarantee. Contact your local Naked Real Estate agent to find out more.

Written by Naked Writers

Pitfalls of Overpricing a Property
Naked Writers

Naked Real Estate Writers collaborating to bring the latest news and trends in real estate for buying, selling and working in the exciting world of real estate. Is it time for you to get Naked?

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