When looking to sell our property, we often price our properties above market value in the hopes that we can fetch a good price after negotiations. However, pricing your property high may negatively affect the sale of your property. While it is tempting to do so, we may actually lose a large portion of our suitable buyers and permanently hurt our position in the market.
How to determine market value?
With the help of online tools, it is not difficult to have a good estimate of the market value of our property. Tools for the HDB resale market and private properties market can tell us the prices of latest transactions.
We can also do our research on open listings on property listing platforms such as PropertyGuru, by looking at old listings. If these older listings appear good but have an above-average price point, this price is likely what the market perceives to be over-priced.
What’s wrong with over-pricing?
On most property platforms such as PropertyGuru, buyers will set their filters to filter out properties that are above their perceived market value for the property. This means that if your property is too over-priced, these buyers will not even have a chance to come across your listing.
“I can lower the price accordingly.”
Even if we take the approach of lowering our property prices after some time of having no response, buyers in the market will notice that your listing is older than most others. They may think that there is something wrong with your property for it to be re-priced to a lower value after a long time.
At this point, we have lost a bulk of our potential buyers due to over-pricing, then lost another bulk of them due to our prolonged time in the market.
How can I fix this?
If you have already over-priced your property and are having trouble selling, you can salvage the damage by re-posting your listing to let your listing seem newer. This only works for buyers that have recently joined the market for units similar to yours. For buyers (and agents) that have been in the market around for awhile, they will know that your listing is a re-post.
For those of us who have yet to list our properties: a well-researched and realistic price point for our properties can fetch us more viewings and offers from potential buyers. Just because we priced our property at 530k does not mean we have to let it go at that price!
In fact, with more customers willing to offer for our property, we have more options and room for negotiation. This way, we may get an offer above the market value.
Pricing Strategy
With tools on the internet, especially those provided by government agencies, evaluating the price of our homes has become a lot easier.
However, property is a large asset, and a small deviation in price can severely affect the outcome of a property sale. There are strategies to secure viewings and offers from potential buyers within a short span of time.
An experienced real estate agent will be well-versed with properly evaluating the price of your property, and have the knowledge to strategically price it on the open listings.
As we discussed above, properties that are left out in the market for too long tend to get fewer viewings and lower offers from buyers. Securing an agent early into the journey can save you a lot of time, money and effort.