The higher the asking price, the higher the sale price…..Right?

Before saying ‘yes’ to this strategy, it pays to think it through. In fact, the opposite is often the case. If a property is really overpriced, purchasers just sit back and wait to see what happens. If they’ve been looking around long enough to be ready to commit themselves, they’ve also made themselves very familiar with what they can get for their money and can recognise an overpriced property when they see one. Many even refuse to inspect properties they perceive to be overpriced, for fear of wasting their time. The problem for vendors is that the only buyers who don’t know what market value is have usually just started looking. They are not ready to buy because they haven’t done their homework yet.

Many inexperienced vendors believe that the “right” buyer will eventually come along - someone who will fall in love with their property and pay the earth for it. In practice people buy with their pockets as well as their hearts because for 97% of Australian and New Zealand home owners, the family home is the biggest purchase they will ever make. No one goes into it without making comparisons and weighing up all the factors.

In a sense, there is no such thing as one “right” buyer. Most people want value for money and many houses are “right” for a purchaser when the price matches the property when they compare it to other properties that have sold in the area. It might help first-time sellers who think that no matter what price a property is advertised at, purchasers will always make offers to put themselves in the purchaser’s shoes. Buying a house is really stressful. Most people won’t let themselves get emotionally committed to something they feel is never going to come down to a realistic level. It’s easier psychologically to move on and make an offer on something that is more realistically priced.

It’s always worthwhile to leave a negotiating factor when setting the asking price of a property for sale, but the price should be competitive so that buyers will want to snap it up before someone else does. The best price is nearly always achieved in the early stages of marketing.