Buyers can spot an overpriced property right away

Setting an asking price too high, hoping it gives you room to negotiate, is one of the most common mistakes home sellers make. Sellers often assume that if buyers like the house, they will just make a lower offer.

In reality, that almost never happens, according to Seeff Pretoria East. Instead of starting a conversation, an overpriced tag usually leaves buyers disinterested and they will simply walk away from the property listing.

Today’s buyers have more information than ever. A quick search on property websites gives them instant access to recent sales data and competing listings nearby. They know exactly what homes in your neighbourhood are selling for, and they can spot an overpriced property right away.

On top of that, serious buyers do their homework before viewing homes. Most work with real estate agents who guide them on fair market values, says PG van der Linde, manager for Seeff Pretoria East. Most buyers will already have a home loan pre-approval from their bank. Since banks will only lend what a property is actually worth, buyers are bound by strict budgets and official bank valuations.

Buyer psychology also plays a major role when a listing goes live. When a house is priced right, buyers feel a sense of enthusiasm and urgency. They don’t want to lose the home to someone else, so they often submit strong offers very close to the asking price. But when they see a price tag that feels unreasonable, they do not bother making a lower offer. They move on to avoid wasting time on a an unrealistically priced property.

The biggest risk with overpricing is that you lose your best momentum, says van der Linde. The highest interest in a property is during the first few weeks of its listing. If the price is set too high, the property will not show up in the search results of the potential buyers who can actually afford it. If someone looking in a higher price range stumbles across your listing, your home will not compare well against the larger or newer properties genuinely worth that extra money.

Starting high does not give you a safety net to bargain down. It simply takes your home off the radar of real buyers. People do not see an inflated price as a starting point for a deal. Overpriced homes simply sit on the market unsold until the price is dropped to match what the market is actually willing to pay.

Issued by Gina Meintjes