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SELLING YOUR HOME? Things You May Want To Know Before Pricing It

selling your home

Most property sellers would feel emotional in the process of selling their homes.  Some of them are not even prepared to do it.  People love and take pride in their homes for the memories and value, nevertheless there are also those who just want to make a big fortune from the sales.  Consequently, it is pretty common to see sellers pricing their homes rather emotionally than rationally causing them to be overpriced in the market.

woman by the window

Unfortunately, many are still not aware of the dangers of an overpriced home.  How often we hear these arguments:

”I have spent so much on the renovation, or My unit got the best facing in this development, or I am selling at $xxx because I bought this unit at $xxx so please try first, we can always adjust it later”.

Do you think buyers will agree that your renovations done in many years ago still hold the same value today?  Do you think buyers care the reason you are selling high because you also bought high?  As a matter of fact, all they care is to pay the fair market value of your home.  Besides on some occasions, price adjustment does not help much in fixing the situation or bring your expected result.

Wrong pricing is equivalent to wrong strategy.

Whether in war or in business, adapting a wrong strategy

could be a series of damaging effects.

What Happens When Your Home is Overpriced?

  • It will invite unprincipled or unethical agents.

In the market, there are agents who will agree on any price you ask or worse, they encourage you to have high expectations just because they want to win your listing.  You might also encounter agents who have other motive such as using your home as a ’show flat’ where they will swing buyers around only to show how ’expensive’ your property is when compared to their other listings

Good property agents prefer to work with clients with realistic expectations, or else they cannot survive in the business.  A professional agent understands the challenges of selling an overpriced property, and the first thing they want to avoid is having failed listings.  The cost of marketing properties is now getting more and more expensive.  Property portals are now limiting the number of listings which can be posted in agent’s account and they also charge for every credit used to boost the listing.

Real Estate Agents need to be selective in choosing what can be listed in their account, due to the limited posting slot, not to mention the daily boosting cost which can jump very high.  Good agent can detect failed listings in the early stage and they will choose not to waste their resources on this.  Does it explain to you now why they do not want to promise something which they can’t deliver?

Do you prefer to work with agents who will give you their honest opinion and advice or with those who just want to please your ears?

  • Your home will not appear in the search.

Today we are in the age where consumers prefer to use search engine to get information and updates, and this also applies to home buyers.  Both buyers and their agents have turned to property portals to search for homes instead of relying on classified ads alone.  Every search will always show result based on the data entered into the system, here is an example:

Buyer A is looking for a 5-room flat in your neighbourhood with a maximum budget of $500,000.  He keyed in a price range of up to $500,000 to be shortlisted.  Meanwhile, you are advertising your 5-room flat in the same neighbourhood at $530,000.  Your home will not appear in his search result as it is exceeding his price range.  Unfortunately, buyer A has no intention to increase the range higher as he is aware that the market price for a typical unit is only up to $480,000.

In the meantime,

you are still there sitting at home

wondering why nobody calls…

selling your home
  • Your ambitious price makes your home loses its appeal.

Another scenario that might happen is, your home finally appeared in the list because buyers or agents put a wider price range to see more units delivered from the search.  However after going through the results, they will ‘skip’ expensive units and give priority to those cheaper than yours.  This case often happens with buyers represented by agents.

The purpose of engaging agents is to expect them to find and recommend good homes within the budgets.  In line with this duty, a buyer’s agent will first choose to focus on homes which match their client’s budget.  Only after searching high and low but yet unable to find a suitable one, then they might give your home a chance.  Not just agents, even direct buyers will also prefer to stay away from an overpriced home.

As you can see here, indirectly your overpriced home helps your competitors, making them look like much better deals.

selling your home
  • You might lose potential buyers.

Even your home eventually gets responses and viewing appointments, offers will hardly come by.  You might be asking why but the reason is actually clear, because these viewers do not want to offend you neither they wish to be labelled as ‘low ballers’.  It is really tough to make an offer far below the asking price, and in most cases such offer leads to a jammed negotiation.

If this keeps on happening, there is a risk that you would eliminate good buyers in the process.  Like sellers, buyers have different types of profiles too.  Some of them only make one offer and do not come back, while others will try to negotiate but will not haggle.  Having a smooth negotiation on an overpriced home becomes a challenge as the price gap is too wide to reach a compromise.

It is just the matter of time when these potential buyers will finally find their homes and as they put their deposits, your home is still waiting for the next round of viewers who ‘dare’ to match your price.

selling your home

And if by the time your house is the only one remained unsold, hopefully you will not have new competitors coming with friendlier price while your listing is still holding the highest price tag.

  • Sitting in the market for too long will give a bad image on your property.

This is the time when buyers will start finding fault with your property.  They will be wondering why this house has been so long in the market but still could not sell.  Is there any problem with the house or seller is just testing the market?  It is at this stage even you make some price adjustments but the market is not responding much.

If buyers happen to recognize your home, they would definitely notice whenever your price drops.  While you are now just trying harder to sell but buyers would have a different idea of you being a fickle minded seller. This will trigger a series of questions like; Why this seller has to keep adjusting the price?  The price seems okay now but hey, what if it drops further next month?  Why nobody has made any offer so far?  Is the house haunted or Any murder case inside?

selling your home

When it comes to reasoning both sellers and buyers are equally good.  They can easily come up with tons of ‘funny’ thoughts and ideas just to corner you.

You would not want them to think that you are now desperately struggling to sell because when it does happen, regardless of all price adjustments made they will still come with ‘low ball’ offers.

  • It will take too much time to sell and finally lose the momentum.

When you put your property for sale, the market will actually give you signals through feedbacks.  As a seller you should take note what these feedbacks are.  If the only feedback is ‘price issue’ then you should wake up and realize that no amount of marketing can move an overpriced property. 

Many sellers fail to see that when it comes to selling, time could potentially be an enemy!  We often hear things confidently said like these:

“Give me more time, I can wait for the price I want”.

“I have plenty of time, don’t rush me”.

“If not for this price then I am not selling, next round there are always buyers willing to pay my price”.

Well, how much time? How much longer?  There is a time frame in selling properties and the best time to get most attention falls on the earliest stage when you put them in the market.  If you take too much time, your home becomes an expired listing which by nature will not attract much audience anymore.  This is what I mean by losing its momentum.

On a side note, your situation could turn into a serious issue when buyers want to know how much the last offer is, and how long your house has been in the market, and you do not have answers which would benefit you.

selling your home

Another situation that time could be your enemy is when suddenly the market changes but not in your favor, and this happens because you are giving yourself too much time.

  • Home valuation issue.

You might be lucky to finally find a buyer who’s willing to pay your price.  But wait, there is another problem now!  This buyer must get a valuation from bankers or valuers before he or she can get a loan to purchase your house. 

All bankers and property valuers will not adjust their valuation to match your price and expectations.  They will neither overrate your home renovation nor agree on how perfect the unit’s facing is, but the valuation will be done just according to its rules and guidelines.

And here comes the problem, it is when the valuation report is showing a lower market value than the purchase price, and your buyer’s loan application is not approved, leading to a botched deal.

selling your home

Price Your Home Correctly, Be a Realistic Seller

Setting a correct price on your property could be challenging, as you do not want it to be overpriced but you also do not want it to be underpriced.  This is the reason why courses such as Pricing and Sales Mastery exist and costly.  You will learn that there are many factors involved to determine a property price.  If you are not sure about this, it is better to work with an agent.  Try to find a professional Real Estate Agent, they will advise you with data, not just a mere talk.

Never appoint an agent based on who promises you the highest price.

And do not fall into this trick because after a couple months of unsuccessful efforts, they will surely come back pleading you to drop your price.

selling your home

At the end of the day when you finally surrender to the market forces by reducing price, you need to understand that doing in the later stages will not have the same impact as pricing it correctly from the beginning.

selling your home

There are still a lot of explanations why overpricing your home is a bad idea.  Drop me a note to invite me for a property discussion if you want to know more.  I would be happy to share my experience and advice you on pricing your home correctly.  I have a passion in Real Estate and in my years of practice, I have helped a number of clients to achieve their real estate goals.

ABOUT ME

Lina Halim is on a mission to assist you in reaching your real estate goals.

As a Senior Associate Director with OrangeTee & Tie Pte Ltd, she takes the time to listen and understand your unique needs, only to plan and tailor a custom strategy that will help you acquire the specific property assets.

Never a fan of high pressure tactics, Lina centers her business on being committed, sincere and genuine with her clients.

She uses her real estate experience and property market knowledge to scope out only the most fitting opportunities for her clients.

Be it a need to get the right buyer or seller, she always put the client’s interest and ultimate goals as her priority.

property agent

This Post Has 2 Comments

  1. GR Toh

    Great insights Lina!

    What in your opinion is the best approach to pricing my property then?

    1. admin

      Thanks for reading my article! Can you provide me with more details so I can understand your situation better? You can reach me at readytenants@gmail.com, hope to hear from you soon!

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