Seven pricing myths debunked
Sellers inevitably want the highest possible price which often results in thinking that setting your price at the highest possible level will get you better offers closer to the desired price. In reality, nothing can be further from the truth.
Setting the asking price is an art, best understood by a skilled and experienced area agent who keeps their eye on the market and local area selling prices and will give you the best advice.
Simply put, sales success starts with the correct asking price. Setting the price at the right level can mean the difference between getting a quick offer and drawing little interest which may result in having to drop your price to get an offer.
There are many pricing myths which can stand in the way of a successful sale. Let’s examine the seven most common pricing misconceptions:
1. Let’s wait for a better offer – research has shown that the first offer is often the best as it is based on the value that buyers attach to the property. Sellers tend to be sceptical at first, thinking that the buyer is trying to make a quick bargain buy. If it is a fair offer, you should always consider it. There are no guarantees that another offer might come along.
2. A quick offer means the agent priced too low – the objective of selling, is to get a good offer as quickly as possible. Receiving an offer soon after listing means that the property is on the market at the right price to attract buyer interest. If you appoint a credible agent, they will not risk their reputation on giving you incorrect pricing advice.
3. A high price leaves room to negotiate – this is a weak strategy which may have the opposite effect. Today’s buyers are informed and aware of market conditions and prices. They will simply overlook an overpriced property in favour of those which are correctly priced. You may have to make price cuts which in turn could attract bargain hunters rather than serious offers.
4. That’s not what I read in the news – with so much written about the market, often by people who are not local experts, it is easy for sellers to get caught up in the hype of rising prices. Many sellers also look at the property portals which are generally overpriced. It is best to trust your agent who will use local area sales to advise on the appropriate asking price.
5. But I spent so much money on renovations and improvements – renovations do not equal a higher price. While some improvement of an older property may well be advised, you should take care not to overspend and overcapitalise. Always consult a local agent and do a ‘Cost Versus Value’ analysis before embarking on renovations.
6. My agent is overpricing to make a more commission – if you choose a credible local area agent, they will not risk their reputation of providing the best guidance and success for clients and certainly not for short-term financial gains. In any event, overpricing is not going to result in a sale and is unlikely to motivate any agent.
7. Reducing the price shows weakness – while no seller or agent would want to be in this position, there may come a time when it seems that the market is just not reacting to a particular asking price. In such instance, if you need to, or are motivated to sell, your agent may advise a price drop. Remember, time is money and the longer your property is on the market, the more it costs in bond repayments, utility costs and so on. Lowering the price could even result in a better offer.