Simon’s Town Real Estate News

Sellers Overprice?

Why do sellers overprice their property?

Many sellers believe that they need bargaining room. This idea is based on the wrong believe that you cannot create competition between buyers. There’s another problem; buyers need to see your home before they can buy it. And they decide on price if they can buy it, but your negotiation fat stops them.

Let me share an idea with you.

It has been proved that most people who buy a new property buy for 50% more than what they sell for. Let’s say your home is worth R3 million but you list it for R3.3 million to give you negotiation room. You have just reduced to number of people who will be interested in your property by 30% to 40%. The lower end who could afford your home will not even look at it because of the price and the people at the top end who visit your home will not be interested in it.

The truth of the matter is that it’s better and easier to sell your home by negotiating a buyer back up to fair value than it is to inflate your price.

When you lack reliable information about property guidelines and property trends in your area you can easily overprice your home.

When you buy your new property at an inflated price you may be inclined to overprice your current property. It also happens when you purchased property when the market is going upward and selling when the market is going down. The good news, in most cases, is that the when you sell in a downward market, the same trend should affect the area of your new property. (I am not talking about your move to London).

Some home owners think they can ask more because they are moving to a pricier area (London?). This may seem ridiculous but it happens. Unfortunately your buyer does not care one iota where you’re moving to.

Owners may want to sell for more because of debt. In this case the owner is under stress and this is the worst time to overprice a home.

When you have over-improved or over-capitalised you cannot expect to get a return on that investment. This is a tuff fact to face because you may also attach emotional value to your property. Unfortunately the buyer decides on the value and emotion hardly ever plays a role.

When you need free pricing guidelines your home using comparative market analysis feel free to contact us today.

Wishing you well.

Johan and Elmarie Horak
P.S. “I would rather turn you down today than let you down later”
Cell: 082 870 2004
Cell: 082 955 6464

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Tags: Before You Sell, Real Estate Agent