Overpricing residential property is a tactic that can backfire on the seller

It can, says Tony Clarke, Managing Director of the Rawson Property Group, be very frustrating to see just how often certain members of the public simply will not take valuation advice from reputable estate agents, even when this is given with complete sincerity.

“For as long as I can remember, eight out of ten agents have been advising their selling clients to avoid overpricing – for the simple reason that it is a tactic which does not work. The two out of ten not giving this advice and consciously going along with too high a price are probably doing this so as to get a mandate.  When a few months later the property has still not sold, they will blame the market conditions and such factors as over-supply.”

The problem, added Clarke, is often that the man-in-the-street relies on dinner talk for his property valuations and his perceptions are very often a year or two behind the true conditions.

“When, late in 2008, for example, we began telling our clients that they were now in a buyers’ market, that sales times had doubled to an average of 12 or 13 weeks and that upper bracket homes had lost some 20% of their value, there were some who just could not accept this.

“Of course, all of us realise just how upsetting and traumatic it can be for a seller to have to reduce his price on a home to which he has given a great deal care and on which he has probably spent considerable sums of money. However, market values have and always will prevail and buyers – especially today’s buyers – will not be misled. They have a range of online resources to consult as well as the day-to-day advertisements in the newspapers. They will learn fairly fast what homes in their target areas are worth.”

Those sellers who put their homes up for sale at high prices in the expectation that the market will eventually catch up with them, said Clarke, are also misguided because when a home is on a sales list for month after month it picks up a stigma and tends to be seen as being somehow flawed. In the end, in all probability, it will sell for below its true market value.

“The seller must always realise that the market determines the final price of a property and, although the market may seem harsh to the seller, it is always right.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 19 Jan 2018
      Extending from Randfontein in the west to Roodepoort in the east and including the towns of Krugersdorp and Magaliesburg, the West Rand has a plethora of property available to residents who choose to make this unique area their home.
    • 19 Jan 2018
      When it comes to financial planning, doing the work to ensure you’re prepared for unexpected emergencies is just as important as ticking off your other goals and New Year’s resolutions. The beginning of the year is also the perfect time to review your various insurance policies.
    • 19 Jan 2018
      No surprises at the first Monetary Policy Committee of 2018, as Reserve Bank Governor, Lesetja Kganyago, announced that the interest rates would stay at their current levels.
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
    • 18 Jan 2018
      New year, new goals! If you’ve resolved to purchase your first property in 2018, then this 6-step guide from the Rawson Property Group is a must-read. It will help you navigate and simplify what is often be seen as a confusing process of buying your first home – right from the house-hunt to the house-warming.
    • 17 Jan 2018
      While the current property market may still favour buyers, it doesn’t mean that they shouldn’t be well prepared before putting in an offer to purchase.
    • 17 Jan 2018
      Lightstone lists Blair Atholl as the most expensive suburb with an average house price of R11.2 million, followed by Westcliff (R10.5 million), Dunkeld (R9.3 million), Sandhurst (R9.1 million) and Inanda (R7.2 million).
    • 17 Jan 2018
      As it currently stands, there are four main ways in which a home can be bought in South Africa, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who adds that deciding in which legal entity to purchase the property is not a decision that should be entered into lightly, as each has its pros and cons.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us