Why overvaluing your property could have a negative impact on its sale price
In 2020, Rightmove produced data that corroborated evidence indicating a property is considerably more likely to sell for its peak value if buyers are ‘bidding up’ for it. In simple terms, this entails a weekend of mass viewings, maybe a deadline for final bids & negotiations, and urging buyers to make greater offers in order to create competition and get the highest sale price possible.
Why overvaluing your home could have a negative impact on its selling price.
The introduction of Covid 19 has opened up a new market in Central London with the sales market growing calmer, and estate brokers scrambling for jobs. The result of this has the potential to be disastrous for property values, as some estate agencies purposefully overvaluing properties in order to gain attraction and increase the likelihood that the consumer would choose that particular estate agency.
Our GLP Sales team is often requested to assess houses against rivals who each offer a different set of conditions, services, and marketing packages than the other. However, when it comes to a valuation, if an agent is well-versed in the region, the values will be in the same ballpark or somewhat higher — these prices are based on real accomplished previously sold prices as well as how the market in the area is doing at the time.
So, what is it about listing your home at a higher than market rate that is possibly detrimental?
Naturally, this will result in your house being on the market for a longer period of time, which has a negative impact on sales as purchasers wonder if there is something wrong with the property and why hasn’t it been sold yet. Additionally, on major portals like Rightmove and Zoopla, the longer your home remains unsold, the lower down the listing it appears on their websites, resulting in a reduction in the number of applicants that view your property. Their platform recognises and promotes new properties by putting them in the spotlight and awarding them the top positions.
Your agent may then recommend a price decrease at that point in order to put the property’s value more in line with the market’s value. According to research, purchasers who examine homes that have undergone a price decrease naturally anticipate the vendor would accept an even lower offer, which is almost always below the market value. All of the above will take place over a period of 2 – 3 months, which may cause a snag in the chain you are now in and could result in your future dream property falling through.
In 2020, Rightmove produced data that corroborated evidence indicating a property is considerably more likely to sell for its peak value if buyers are ‘bidding up’ for it. In practical terms, this implies a weekend of mass viewings, maybe a deadline for final bids & bargaining and pushing buyers to make greater offers, so increasing competition and reaching the highest possible price for your house.
Earlier this year, Zoopla’s CEO released numbers that corroborated Rightmove’s findings that houses that were under offer in less than three weeks sold for MORE than their original listing price. In addition, they produced numbers demonstrating that 60 percent of homes that had been on the market for more than 60 days were withdrawn from the market and relisted with a new agent at a price drop of at least ten percent. In only four weeks, more than three-quarters of these were under offer.
However, most interestingly, houses that had their prices reduced when they were finally sold, had sold for 18 percent LESS than their initial posted price, which is a significant difference.
Greater London Properties is always available to provide guidance and assistance throughout the sales process. In the event that you have opted to use a different agency, please do not hesitate to contact us on 0207 113 1066 if you have any questions or concerns.
We are more than delighted to assist you.
Warmest Regards,
