Buying and selling real estate is not an exact science.
Real Estate salespeople are required to comply with the current legislation, and in New Zealand, for instance they need to abide by their professional client and conduct rules.
Rule 10 is very important as salespeople are required to supply a market appraisal that reflects current market conditions and it should always be realistic.
So no matter how much you love your home, there is no guarantee that when you come to sell it your buyers will admire it as much as you did, or find it as good a value, if you did, when you first bought it.
When it comes to selling them, you should always put yourself in the buyer’s shoes and look at things from a buyer’s perspective.
Buyers buy by comparison
We need to research the competition, and know what we are up against as buyers will mostly buy “by comparison”.
By being prepared and knowing what other similar properties are selling at before you go to market is always sensible.
It is crucial to choose the salesperson who is experienced enough to know that by telling you what you want to hear in order to win the listing is not the right way to go.
Buyers will buy at “fair market price” and not pay you extra because you think that your house is worth more.
The consequences of overpricing at the beginning can often cause you to sell for much less in the end.
9 reasons why you should price your property correctly at the start of the sales process:
- An overpriced property discourages prospective buyers from making offers since the difference between the asking price and the market price become substantial.
- You will only help others sell their properties when buyers compare them to yours on the internet.
- Salespeople loose interest in overpriced properties and will concentrate on the ones that are priced correctly and fairly in the current market.
- There will be a decline in viewings as salespeople will avoid showing the property in order not to lose credibility with their buyers, or they could show it and sell another home because it is priced correctly in the current market when compared to yours.
- Potential buyers could get turned off by the price and fail to make any further enquiries.
- Purchasers who require financing often require a registered valuation by the Bank’s Valuer which will be based on market related sales data – if a lower value based on those statistics is found, then the finance will fail, and the sale will fall over.
- You waste advertising dollars with an overpriced property, as it will not get the normal advertising response and often an extended campaign will be required, therefore more money will need to be spent on advertising.
- Eventually market interest will decline on an overpriced property and when this happens sellers often become desperate and some will sell for much less than fair market value.
- In the meantime a seller’s maintenance, holding, and advertising costs have increased, and they will get much less in the hand than they would have if they had priced correctly in the first place.
Selling a property is almost always a stressful process as there is a lot of emotion involved with the decisions involved around moving house. It makes sense then to ensure that you do not prolong the time on the market by out-pricing your home in comparison to others.
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