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Reasons to avoid overpricing your home

If you want to sell your home as easily as possible, it is crucial to set a realistic asking price.

Reasons to avoid overpricing your home

It’s only natural to hope for the highest price for your property, but it is important not to be greedy. If you spend too long holding out for a more lucrative offer, you may miss opportunities to sell – especially when the only thing putting buyers off is an unreasonable asking price.

Tricks of the trade

When you choose an estate agent to sell your home, make sure you get more than one valuation – three is the magic number – and then you can work out the average of those figures. A tactic, albeit somewhat unethical, employed by some estate agents is to overvalue your home to try to secure your business.

Lenders can spot an overpriced property a mile away, and you may find that your buyers have trouble obtaining a mortgage if the lender’s valuation comes back lower than the sale price.

Getting the right balance

If you start off with an asking price that is too high, your listing can become stale after sitting on the market for months with little interest. Even if you then reduce your price, your property still won’t create the buzz that it would have when it was new to the market. House hunters may also worry about the reasons for the reduction – ‘what’s wrong with it?’; ‘why has it been on the market for so long?’; ‘would re-selling be difficult?’ etc.

You don’t want to feel as though you are being taken advantage of by the buyer, but equally the buyer needs to feel as though they are also getting a good deal. Agreeing on a realistic asking price from the outset can lower the chances that your buyer will try to gazunder the deal at the last minute, and force you to renegotiate at a much lower price than you are content with, or risk the whole chain (if there is one) collapsing. Aim to reach an agreement that satisfies both parties.

Look at the bigger picture

Put yourself in the position of the buyer – If you saw your house on the market for the price you want to sell at, would you buy it? If the answer is ‘I’m not sure’, then you may need to reconsider.

Not everybody wants to haggle – You may feel that a higher asking price leaves you more wiggle room for negotiations, but instead of making an offer they feel is fairer, some people will just turn their attentions toward other properties that seem more attainable.

A means to an end – Having a property lingering on the market for a long time can bring a lot of unwanted worry. You may find that cutting the price is a worthwhile sacrifice to avoid the hassle of keeping your home immaculately tidy for months and having to endure a seemingly endless flow of fruitless viewings.

Cause a stir – Set the price for a quick sale, and your property could generate some real excitement. A new tactic sellers are employing is to ask a surprisingly low price. This gets potential buyers in through the door who then fall in love with the property. In the best case scenario, this could start a bidding war to drive the sale price up for your home, so you can end up getting more than initially thought.... just as long as the valuation survey agrees!

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Hannah, 09 April 2017

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