Sellers like to drive the price they think their property should sell for, but be cautioned this can lead to problems later on. Think for a moment. Who determines the market value of a property? It’s the buyer.
How does the buyer do this? Well, the prospective buyer who visits your home has become an expert in comparative shopping. Remember, he’s probably seen all the properties in your area at your price range. He may have seen 5 last week and 10 the week before and a number of showdays the week before that. (Have you been out to the show houses yet?)
So the buyer is the ‘expert’ as he has compared properties. The buyer has an idea of which properties show value and which ones are overpriced.
Your agent would have given you a valuation based on comparative marketing analysis. You may force the agent’s hand into pricing what you want because, after all, you’ve done your sums and to come out looking pretty, this is what you WANT.
The facts are that if you decide to price your home optimistically, it will more than likely end up being on the market for a long time, start to look undesirable and then sell for less than market value. Something like this…
You’ll probably open your mandate to other agents after a few months since the first agent, on ‘sole’ mandate could not bring any acceptable offers AT YOUR PRICE as buyer’s thought it was too expensive. Now just imagine lots of competing agents, each wanting to expose your property more than the other. They may even dabble in subtly cutting the price to bring in buyers. Still working AT YOUR PRICE, ten agents battle to sell even with their constant advice to drop the price.
Our ‘expert’ Buyers will notice the sudden over-exposure in the market place and take it as an indication of desperation or that something is wrong with the property, and those who might be interested will sit on the sidelines waiting for the price to drop even further.
Eventually, you will decide to relook at your sums and drop your price, however, you are now so desperate to have it ‘over and done with’ that when an offer is finally accepted, your property is sold below market value.
So your property sells for less, and on top of that you suffer months of inconveniencing show houses and viewings during family time. Would you then blame the agents for not achieving YOUR PRICE, or do you now see where the problem started?
Why not take your first agent’s advice and sell at market value in the first few months? No headache and you’re smiling!
Read more about the advantages of sticking to a sole mandate.
This article highlights this dilemma – “Sellers: It’s risky pricing high to see what happens.”