Why you shouldn’t overvalue your house when you sell it

Hoping that a buyer will overpay for your home isn’t a strategy, it’s a wish, warns South African property company, Seeff.

“As a seller, you naturally want to get ‘top dollar’. The chances are also good that you have a deep emotional attachment to your home. Combined, these factors often lead sellers to insist on a high price,” said Elaine Chetty of Seeff.

She said that the exercise of placing an inflated price on your property is self defeating.

“Our analysis of website activity shows that new listings get an average of 50-60 page views on the day that they hit the market. Houses with price drops get only 15-20 views,” Chetty said.

“First impressions matter. If your home is overpriced when people first see it, chances are good that they won’t look at it again” Chetty said.

Seeff estimated that a house listed for sale gets 3.5 times more web traffic in the first 7 days than it does one month later. After the first 3 days web traffic to existing listings slows by more than 65%. Within 3 weeks it’s down by 85%.

“In short, your home’s debut is its best chance to shine. An overpriced property is more likely to be ignored. In this current market, don’t expect a rush of lower offers either; people won’t assume that you’re willing to negotiate.

“By the time you lower the price, your home will have the taint of being a ‘languisher’, stuck on the market. Fair or not, a home fresh on the market at R1.2 million looks different than one reduced from R1.5 million to R1.2 million,” Chetty said.

Seeff pointed out that even if objectively it’s a good home, if it’s been on the market for a while, many buyers will wonder if there’s something wrong with it.

“Once that stigma is there, it is going to be hard for a seller to get full asking price. If there has already been a price cut, savvy buyers will start circling. This is not a good situation for sellers to be in,” Chetty said.

Most buyers will look at your home on the first day it comes to market – so make that impression count by pricing right, Seeff advised.

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Why you shouldn’t overvalue your house when you sell it