"Price Fixes Everything"
Having just had my best sales month pretty much ever I thought I would address the issues of overpricing property. Sometimes it could be a real estate agent not doing their homework properly but sometimes vendors go about putting a value on their homes result in unrealistic expectations of the ultimate selling price.
For example, some people decide to base the figure they will sell for on the amount they need to buy their next home which means they don’t think of the fact that the market works on supply and demand and that unless their property type is in short supply (i.e not many of them exist) and in high demand (lots of buyers would like to buy this type of property) buyers will simply find a cheaper similar property round the corner or down the street.
The best way that both agents and vendors can determine their likely selling price is to do their homework on local sales of similar properties, with emphasis on the word ‘similar’ because some people just can’t help over valuing their properties by looking at their own asset with rose-coloured spectacles (is the fourth bedroom really a bedroom or would it be better classed as an office. If a property’s features are over stated in the advertising materials, disappointed purchasers often point the finger at the ad writers or real estate agents when in fact the ‘puff’ is sometimes vendor driven as unrealistic vendors push for prices that only someone with the bias of ownership could come up with. Conversely, purchasers visiting their umpteenth open for inspection rarely come equipped with rose-coloured spectacles
Bridging the expectation gap can be a confronting experience for vendors and many only realise too late that timing is one of the most crucial aspects of achieving the highest price. If they keep the rose-coloured spectacles on for too long and turn down offers they later realise were reasonable, it is likely that the property will become stale and purchasers will lose interest. This is the scenario that vendors should avoid at all costs by taking a reality check early in the piece rather than waiting months until it becomes so obvious that the price is wrong that only the bargain hunters are still interested
I can confirm that I’ve been guilty of over pricing on occasion, where I thought a property would be more popular than it was or I fell in love with it and thought the market would do the same (it didn’t) but I remember the real estate truism I heard many years ago, “price fixes everything”. It’s as true today as it was when I first heard it.