Three reasons why properties are often overvalued and why these reasons can lead to
disappointment:
1. The seller awards the mandate to the estate agent who offers the highest valuation with
the aim of securing the mandate. This is the most common reason. Sellers should be aware
of this ‘trap’ and should insist on a well-researched Comparative Market Analysis (CMA).
2. The sellers feels that their property boasts features of higher value when compared to
properties with similar characteristics in the area. Upgrades are not the main deciding
factors with buyers, but rather location and size. What might be considered value to you
might not have the same value for a buyer.
3. Sellers wish to list higher than the fair market value to ‘test the market’. On average, you
attract the serious buyers in the first 4 weeks after listing a property. If you are over-priced
in the first four weeks, you will miss the serious buyers.
Pricing your property correctly is vital because buyers are astute in their research, mainly
because their property purchase is of such a high value. They will be very careful to take the
time to find a property that best fulfils their expectations and budget. An overpriced
property will be compared to other well-priced properties and fall short every time.
Furthermore, an overpriced property runs the risk of becoming overexposed which will
negatively impact the marketing efforts.
A proper CMA will ensure that your property is correctly priced from the start and in doing
so, attract the right buyers. A CMA consists of information on the subject property as well as
similar properties that are for sale, similar properties that have sold, and lastly similar
properties that have either expired or have been withdrawn and therefore leading us to the
estimate value of the subject property which is both fair and market related.
ZENITH REAL ESTATE
We do things differently…..it Works!