What You Need To Know About Overpricing

What You Need To Know About Overpricing

Setting the price range accurately to capture the market’s attention, highlight the value in the home, and leave room for competition at auctions is a skill that agents at PhilipWebb Real Estate have been perfecting for more than 40 years.




Set the price range too low and you get the raw end of the deal; too high and you risk losing buyers’ attention altogether.




PhilipWebb Real Estate Agent and Auctioneer Robert Groeneveld explains a few common pitfalls and solutions below.




DO YOUR HOMEWORK


According to Robert the most common reasons vendors set too high a price for their property boils down to poor research.




“A vendor will often benchmark their property against record prices in their area without knowing the circumstances in which those results were achieved,’’ he says.




“Statistics are often no substitute for market intelligence. The house down the street may have sold to a neighbor at a premium as they wanted to create a double block.”




“Consider the development potential for your land versus other sales in your area. For example, a corner block will often attract strong bidding if it can be developed.”




“In an ever-changing market it is important to start from a scratch and go through the most up-to-date data and recent sales in the area to get a clearer picture.’’




AUSTRALIAN’S LOVE A BARGAIN


If buyers see something of similar quality and size for a cheaper price they will be far more likely to purchase it believing they’ve just nabbed the deal of the century. They’ll happily drive away from the higher-priced version saying ‘tell him he’s dreamin’!’. So think about this bargain-hunting mentality when you list your home for sale and ensure you’ve set the right price for your home.




WHEN GREED IS NOT GOOD


Sure, you want the highest price possible when selling your home – however, the job of the advertised price is to get people to visit. Let’s say you want $920,000 for your home, and your agent believes that an offer above $900,000 might be possible. The smartest move may be to advertise it at $890,000+. This way, you give your agent a chance to meet buyers with a notional $900,000 limit, and step them up to a $920,000 offer.




WHEN OVERPRICING HURTS


Knowing when to temper the price you want with what today’s market is willing to pay is a true challenge. Our experience tells us that in most sales campaigns we meet the eventual buyer of the property within the first 14 days of it hitting the market. Experience also tells us that if your home is overpriced from day one, the buyers who cannot meet those expectations will see value in a directly comparable home and possibly purchase it because it is evidence that they got a ‘great deal’.




If you need any further advice, give us a call on 9842 1477.

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Buying