Overpricing scares off peak buyers
Vendors who over value their properties from the start may be losing out on peak buyer interest, a real estate expert has warned.
Managing director of RE/MAX WA Geoff Baldwin said buyers' enquiries are always highest when the property is new to the market.
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“Unfortunately with a majority of new listings the pricing strategy is not in sync with the time when maximum interest is happening,” Mr Baldwin said.
He referred to this phenomenon as the “pricing see-saw”, where buyer interest surges at a time when the price is still well above market value.
“Unfortunately, when no offers are forthcoming the price is adjusted to lift interest, but in most cases it is too late and the listing stalls,” Mr Baldwin said.
According to his research, the sales price of a property tends to reduce by about half a per cent for each additional week until it sells.
He finds the longer a property has been on the market, the greater the buyer’s bargaining power.
“Sellers are afraid of underpricing, but there are several sophisticated and proven strategies to ensure the maximum price is achieved but also that potential buyers are not scared off by a high fixed price,” he said.
“For a buyer to fall in love with a property they must first see that property and one of the biggest barriers to that happening is the asking price, so sellers should ensure the agent they choose is able to explain how they will overcome this challenge and what strategy they propose to achieve maximum viewings and a great sale price.”
