What Happens if You Overprice Your House?

We all want to get the best possible price for our property, and it can be tempting to try and nudge the figure as high as you can.

However, there are some very good reasons to avoid putting an overpriced house up for sale.

In this article, the team at Property Solvers explores the dangers of pushing your asking price too high, as well as explaining how to value a house correctly.

Should I Increase My House Value to Higher Than the Recommended Price?

The answer to this is a simple “no”, even if the estate agent inaccurately advises to do so. Giving in to the temptation of a more attractive price tag can do far more harm than good.

Most house hunters are quite savvy.  They’ll often know pretty quickly that the asking price for your property is unrealistic.

This means you’re likely to receive only under-asking-price bids.  And that’s if you get any at all – and this comes with its own set of issues.

After all, many potential buyers use platforms like Rightmove and Zoopla to find their future property.  These portals offer a way of browsing by price, with a sliding scale that is designed to narrow down a search to homes that fit within their preferred budget range.

This means that the decision to price your property too high with a view to possibly accepting a lower offer if absolutely necessary can seriously backfire – as the buyers who may be in a position to make that lower offer may never see it.

What House Buyers Think…

If house hunters become suspicious of your asking price, they can arrange a number of valuations themselves online as a form of independent “second opinion”.

This – although not always totally accurate – will quickly reveal the ballpark in which they should expect to be paying.

Even if potential buyers aren’t able to spot an overpriced home, their mortgage lenders certainly will be. 

You could get a long way through the process to the point of accepting an offer, only to have your buyers pull out.  This is often because haven’t been able to get a sufficient mortgage and have been advised that the property is worth a lot less than has been previously suggested.  Remember, a property can be overpriced even if you have added value in some form.

Once your property has been sitting on the market for a number of weeks or months due to an overinflated asking price, it is likely to attract less and less interest. Even if you decide to reduce the price, it will probably be outcompeted by fresh new listings due to the way certain sites work.

The longer your house is up for sale, the more expenses you are likely to accumulate – which means that you will never be able to make the tidy profit you were dreaming of. Of course, this totally undermines any reasoning for overpricing a property in the first place.

How to Tell if a House is Overpriced

UK estate agents and property sites offer a number of means by which you can get a relatively accurate home value estimate.

Your first port of call may be to research the recent sale prices of properties in your neighbourhood that are similar to your own. Remember to take into account any differences – such as the number of bedrooms, age, notable features and state of repair.

You can also visit sold house price portals like Zoopla, Rightmove, Net House Prices, Mouseprice, Property Price Advice (amongst others).  These portals use HM Land Registry as a primary source of data.

If you’re selling, it’s also worth contacting individual agents (typically three) and arranging for them to provide their own estimates. An average can then be found between these figures to give as fair a price as possible.  

If your home is already on the market, look at your current asking price. If your new estimates are significantly less than this figure, you have overpriced your home and should consider lowering your sights to match the new information.

Remember: most professional estimates are only valid for six months as the market continues to progress.

What Next?

If the lack of interest in your property points to overpricing, trying to work out how to continue with the same strategy is rarely going to work.  In most cases, a simple reduction to an evidence-backed price will get the result you need.

If you’ve been struggling to sell your home despite a fair asking price, there could be other factors at play.  Some questions to ask yourself include:

• Perhaps there is noise or other off-putting factors?
• Does your property need refurbishment work, the cost of which needs to be added on?
• Is your property being advertised well?  Make sure you’re on all the major portals, the photos and description are good.  The estate agent should be actively speaking with buyers too;
• Is the property in a good condition
• Are you sure your estate agent is dealing with the enquiries?
• Is the property clean and tidy when potential buyers visit?
• Have you removed all the clutter?
• Are there any legal issues / constraints?
• How does your property compare to others on your street condition-wise?
• Is your garden looking good?
• Could your house do with some modernisation?
• Are there many other properties up for sale close to you (thereby increasing the level of competition)?
• Are there any previous buyers you could potentially negotiate with?
• Is your property being marketed at the right time (spring and autumn tend to be the best seasons to sell)?

Contact Property Solvers

To speed up the process and secure a risk free sale, you may consider using a fast homebuying service like Property Solvers.

Our specialists can provide you with a free up front cash offer worth up to 75% of your home’s market value – and the sale process can be completed in as little as a week.

For more information about the services available from Property Solvers, simply contact our friendly team today. We’ll be more than happy to help you.