The untold harm that overvaluing your property can do to your ultimate sale price.
Are you planning to put your property on the market in the next few months? Perhaps you've already had your property valued and are contemplating your next steps? Make sure you don't make this fatal mistake and destroy your chances of a sale before you've even started!
When you decide to sell your home, the first port of call will be to have your property valued by estate agents. This gives you a jumping-off point to begin marketing and entice a buyer to make an offer.
But, there is no exact science to value a property; it is fundamentally an opinion of what the agent thinks they can sell it for. Because of this variability, you will likely have a range of prices to work from, and the advice generally is to take all of the prices you're quoted and take an average of these figures to establish the actual market value of the property.
Sounds simple enough, doesn't it? But it's not often followed. Why? Because it is far too tempting to take all of the estimates and ranges of potential values for your property and go for the highest number. After all, why would you sell your home for less if there's a chance you can get more?
The property market is, in some ways, self-regulating when it comes to the prices and values of homes. Markets, and perceived values of all items, not just property, are affected by supply and demand. If there is a greater supply than demand, the perceived value will be negatively impacted. If there is a lower supply than demand, an item's price or perceived value will increase.
If the rate of supply versus demand goes some way towards regulating the value of property in the market, there will be clear indications of whether you have pushed the price too high once your property is for sale.
The highest interest levels will be within the first four weeks of marketing. It will receive the highest levels of promotion and exposure across all databases, portal websites and social media in these initial weeks. If, during this time, you have nothing but tumbleweeds, and you're confident that you and your agent have got everything right, it's a fair bet that your price is too high.
Potential buyers will assess your property and judge whether the marketing price is fair. If they feel that the price is too high, they won't waste their time coming to view it.
So, marketing your property at the highest price of the range of valuation estimates could leave your home selling experience lacklustre at best.
But low viewing figures are not the only symptom of a price pushed too high. Once you've been on the market a few months without viewings and you begrudgingly come to the realisation that the price was a little steep, you have -
wasted your first four weeks of premium marketing with maximum exposure,
have already been seen and discounted by the current buyers in the market, and
now have to reduce the price and relaunch the property.
But that is not all.
Your price reduction can not simply be dropped down to the average price of your valuation estimates because your property has already been on the market and seen by the buyers. You could have achieved this potential figure with that initial 4-week premium marketing window. But you've now missed this, so you will have to reduce the price of your property to LESS THAN the average of your initial valuation figures to attract the attention of the market and potentially move your property into a new price bracket to appeal to new buyers and a fresh audience.
The issue is not the act of reducing your price but the fact that the property has been up for sale for months, and now you have to chase the market to improve the viewership and audience of the property and appeal to buyers after being advertised at a price that was not appealing. Otherwise, you have simply reduced the price of your property to its value, which isn't a reduction at all.
If your property is on the market for sale and is struggling to generate interest, contact our team of property experts to assess and develop a plan to get you sold!