My last post discussed the pitfalls of underquoting and that the practice, especially by agents (and knowing vendors) is considered a huge ‘no-no’.
Misleading buyers with a lower price guide only to expect and sell at a higher price is now being outlawed in the two biggest property markets – NSW and Victoria.
What about Overpricing?
But what about ‘overquoting’, which is better known as ‘Over-Pricing’?
To me, during fifteen years of property marketing and sales, this practice is a bigger blight on the real estate space that underquoting!
Here is a fact: Almost every seller (vendor) thinks their home or property is worth more than what someone is actually going to pay for it, AND there are agent’s willing to fuel that desire/belief and appraise a property above what it is really worth to obtain the listing.
This can lead to a host of issues and problems – the worst of them being rejection from the market (buyers) based on value.
And that leads to lack of enquiry and inspections, and most likely NO OFFERS.
Then a conversation like this takes place (if the vendor has hired an agent):
Agent: “Well, its been two weeks now, and we’ve had very little enquiry and those who have seen it aren’t making offers. We may have to look at reducing the price.”
Knowing the response that’s about to come, the agent will usually take two steps back or hold the phone away from his ear.
“YOU TOLD US WE COULD GET $X, AND NOW YOU WANT US TO DROP THE PRICE???!!!”
Although the vendor may have been complicit at the time of pricing the home, the news that there is no good news, based around price, is rarely greeted with applause and slaps on the back.
Vital time is lost. Potential buyers have been scared off to buy other more competitively priced properties. It ain’t pretty.
This one of the main factors for the vendor/agent love/hate relationship.
What about when you decide to sell your own home?
First and foremost – DON’T OVERPRICE IT!
Rejection by buyers is a very hard pill to swallow, and there is no-one around to yell at and be pissed off at (no agent).
Here are three steps to pricing your home to attract buyers:
- Get in a Certified Practicing Property Valuer. Contrary to popular belief, their valuation MUST be as accurate as possible by law.
- Subscribe to a reputable property information portal such as Price Finder or Core Logic and get a report of recent sales and activity. The recent sale of similar properties is a great barometer to help you price your own property.
- Get the opinions of a 2 – 3 local agents and tell them straight – “Be realistic. You aren’t here to buy my listing.”
Underquoting pisses off buyers. Overquoting (over pricing) pisses off vendors.
Either way, both practices can put seriously big potholes in the road when it comes to selling your home.