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Selling and Buying, Pricing Property
By arlene | February 13, 2009
Are you absolutely sure your price is right? For every owner-seller who overvalues his property, there is probably one who does the opposite, even if subconsciously to avoid that blow to the ego that could come from a failure to sell. The loss sustained in underpricing is both obvious and instant, providing grounds for recrimination quite capable of lasting for years.
But overpricing can result in a very big loss as well in the case of a determined seller. This is simply because a house advertised at, say, 110 000 which is valued by the market at 90 000 will not only not sell, it will also leave a poor impression. Too high a price means the house will not compare favourably with others in the same range, and also, that it will probably be shown to the wrong buyers who will have had better things in mind. Consequently, the house will stay on the market for a long time, acquiring a steadily diminishing image in the process and offers that do come in are likely to be even lower than the real value of the property as buyers attempt to cover themselves against perceived risk.
There is probably no such thing as a perfect price. Sellers tend to see prices continue to rise after their own property is sold and ponder whether they did not let it go for too little, while buyers quickly become acquainted with the less romantic aspects of their new home and begin to reflect on whether they could not have got away with paying a little less.
Unbiased experience in the property market is the key to establishing as close a price to perfect as possible. Estate agents do have this experience, and it cannot be gained merely from studying the property advertisements since one of the most crucial aspects in setting the best price is knowing, fairly precisely, just how closely advertised prices are corresponding to actual prices.
Not only will estate agents be able to correlate values between different yet similar homes, they should also be able to anticipate the direction of the market. Being in a position to note when actual prices paid are quickly matching advertised prices or the reverse, they should be able to advise prospective sellers accordingly.
There will always be the lingering doubt in many a seller’s mind that an agent will deliberately underprice his house to ensure a quick sale and an equally quick commission. It could happen, after all the agent’s price is only a recommendation and it is up to you to make the final decision. Generally, however, their recommendations and advice are based on sound experience.
Without the agent’s advice, the seller may fall victim to incorrect impressions gained from a buyer attempting to make his purchase look better by quoting a price lower than he actually paid, or a seller who may exaggerate how much he obtained for his property.
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Topics: Agent, Market, Property, Sale | 6 Comments »
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