Do not delay when you realise you have overpriced – Rawson
News > news - 25 Jan 2008
The best time to reduce the price of any home up for sale is as soon as you
realise that you have over-priced it. Do not delay – take action at once.

This is the advice of Tony Clarke, MD of Rawson Properties. “Obviously,”
said Clarke, “one’s goal is always to sell the home as close to the asking
price as possible – but sellers (and some of the less experienced agents)
are notoriously prone to over-optimism and to setting prices that are too
high.

“As soon as it becomes clear after receiving feedback from prospective
buyers that the home has been over-priced, admit your mistake and re-price
it realistically.”

Delaying the decision to do this, said Clarke, will almost certainly result
in the home eventually selling well below its true value.

“As the weeks go by and it remains unsold, it will gain a stigma. It will
come to be seen as flawed in some way and will not attract realistic
offers.”

For many sellers, said Clarke, selling a home on which they have lavished
care and attention can be a highly emotional saga, one they dislike
intensely.

“There will be a tendency for them to resent criticism of the home from
buyers even though this may be valid. They will also, often, lose sight of
the market realities and strive simply to get the better of the buyer in one
way or another.

“In the current scenario this is foolish behaviour because buyers are
empowered now to a greater degree than they have been for the last eight or
nine years. They are also often far better informed than they were
previously. The number of homes on the market has increased by some 20%
over the last year and the average time taken to sell them is now between 12
and 15 weeks.

“Sellers are, therefore, will often finding that all the bids they receive
are 15 to 20% lower than the asking price – and this situation is likely to
continue for the coming year.

“In the more difficult market, sellers may be tempted to try the low
commission or no commission route.

“Those providing these services have had limited successes,” said Clarke,
“but the plain truth is that almost every franchisee in our group has at
some stage been called in to rescue a seller after a disappointing
experience in the low commissions or no commission’s field.”

One of the big dangers of this type of operation, he added, is that the
potential buyer dealing directly with the seller will often assume that he
can drive a hard bargain. “You cannot put too high a price on the
negotiating skills and the market knowledge of an experienced agent,” said
Clarke, “in our experience it always pays to allow him a reasonable
commission in return for which, he will give you a complete, professional
service.”
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