Five Reasons Why Overvaluing Your Property Could Cost You
In this three-minute read, we look at why setting an unrealistic asking price can delay and even derail the sale of your home.
If you’re planning on putting your property on the market, there’s one key piece of advice to remember.
It’s not a slick statement from a TED Talk or the title of a trendy self-help book. It’s an age-old saying that your Nana probably used: “If it’s too good to be true, then it probably is.”
Vendors should keep this in mind when looking for an agent to sell their property in Attleborough and East Harling because there are unscrupulous players out there who deliberately inflate valuations to secure an instruction.
They will say just about anything to lock you into a sole agency agreement.
It’s a self-centred strategy that is about lining the agent’s pockets, not serving the customer, and it can have a disastrous impact.
Here are five reasons why overvaluing your property can prove costly.
Lengthy delays
Moving home, especially if you are in a chain, can be a convoluted process at the best of times.
Starting on the wrong foot, with a totally unrealistic price, complicates things.
According to consumer watchdog Which?, overvalued homes take on average up to two months longer to sell than other properties.
In most overvaluation cases, reality kicks in after a month or two, and the vendor ends up dropping to a more realistic price (the price they probably should have asked for initially). All overvaluing achieves is a delay.
It deters buyers
If you overvalue your property, expect viewings to be slow or non-existent. A considerable amount of information about property sales is available online these days, meaning most buyers know what property in their desired area is worth. They can spot a rip-off and will steer clear or drive a hard bargain.
Buyers also tend to filter their online property searches by price, so if you’ve inflated the asking price, it might not even register in their search.
It messes with your next move
Imagine this: you find your dream home, make an offer, and it’s accepted. Hurrah! Now, all you must do is sell your existing property. The problem is the over-the-top asking price deters buyers, leaving you in limbo.
Soon, the impatient owners of your dream home ditch you for a buyer who is ready to move and you’re back to square one.
Your mortgage deal is threatened
When lenders calculate how much you can borrow, they factor in what you expect to get for your existing property. So, if an agent promises to get £400,000 for your home, and you wind up dropping to £340,000, it leaves a black hole in your finances.
All your calculations are now in tatters, and you must start again with downgraded expectations.
Trust is key
For most people, selling a home is the largest financial transaction of their life. It’s essential to go through the process with someone you trust – not someone who has trapped you into a lengthy agreement by deliberately misleading you.
Before you commit to an agent, do your research, ask for word of mouth recommendations, and prioritise professionalism and honesty over flashy claims.
Here at Millbanks, we promise to give you honest, expert advice about selling your home.