9 April 2015
Pricing your property
Hi I’m Michael McDonald, CEO of Raine & Horne South Australia. I have been in the real estate industry for nearly 20 years as a salesperson, property manager, and agency principal. I have also worked as industry educator and consultant to the marketplace in general.
On behalf of Raine & Horne, I would like discuss with you a few of the important decisions you will need to make when you are thinking of selling your property.
When you talk to various real estate agents you will hear many different ways of potentially pricing your property.
Lets look at this from the perspective of the potential buyer of your property; when you first see a new release that meets your requirements your attitude is, “Let’s see it first before anyone else.”
When buyers come through your home they are making comparisons with other similar properties they have seen within the same price range. In fact, your Raine & Horne agent will happily provide you with a summary of similar properties that have recently sold and similar properties that are currently on the market, as these are in essence your competition. You really need to be very aware of what else is for sale in your area because I can guarantee you the buyers will certainly be.
What has amazed me over the years is how buyers react to overpriced properties. It goes without saying that if buyers feel a property is overpriced, they will walk away and find something more realistic.
But the consequences are really far more damaging than that.
Let’s assume you price your property well above the market price of other similar properties in your area. The first consequence will be that buyers will be less likely to even inspect your property if they perceive that you want too much.
Many buyers will simply view you as greedy and form a moral opinion that excludes even an inspection. Others are too embarrassed to make an offer, believing their offer is too far from the listed price.
Overpriced properties also tend to stay on the market much longer, usually until all other comparative properties have been sold. An overpriced property actually makes all other properties look good, so in reality you are actually helping other people to sell their homes and that’s of no benefit to you.
Eventually you will resort to reducing the price of your property to a more realistic price. This certainly means you have wasted time in the selling process, you have put your future plans on hold, you also risk receiving less than the property would have fetched when interest was at its peak, when it was first on the market.
Please consider these ramifications. Don’t overprice your property to the point where buyers won’t inspect it or even attempt to buy it. Be aware of the prices of other similar properties that are currently on the market and know the prices of homes that have recently sold.
Remember, your Raine & Horne agent can assist you with this information.
Making your properties price look realistic in relation to other properties will help gain the buyers attention and the more attention, the more competition you will have and it is this competition that will get you more than your asking price.