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“To be or not to be” If Shakespeare was a landowner today he might have asked “ To price or not to price”. There are good arguments for and against it.
“No price marketing” is an irritation to the buyers. They want to know the price to rule the property out. If they perceive the price as too high they will not view it. But, if they are uncertain about the price, they might view, which is the driving force behind “no price marketing”. Some buyers on the other hand will not look at any property without a price unless it is a genuine auction or tender.
When the house is priced at market value and you have several parties interested you might achieve a premium. In practise we know that properties sell when priced within only 8% of the perceived market value.
These are some of the consequences of pricing your home too high:
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As most buyers are viewing “fresh listings” they are likely to lose interest after a month. If you reduce the price after the month, most of the buyers are gone.
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If your home is sitting in the market for too long… it will be stigmatised. Buyers frequently think there is something “wrong” with the property if it is sitting on the market for longer than the average selling time.
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If your property is overpriced it will make the surrounding properties look like good value for money and your property will in effect help to sell those.
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Pricing is very important, as a bank will look at risk. If your home is priced too high in relation to the risk of the bank, the bank will ask the purchaser to pay the shortfall. This means that most buyers will have to walk away from the deal as they find it difficult to provide the extra equity.
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Overpricing dampens the enthusiasm of sales consultants and as a result your home will not reach the shortlist for viewing when they take their buyers out. Salespeople aren’t motivated when they know they won’t be paid.
Pricing your home (even with no price marketing you need to have a price in your own mind) is a complex issue. All the sales data are historical and no one, not even the real estate people, is sure what will happen in the real estate market in the future. So you must be sure that the price you put on your home is market-related.
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