Why you and your agent should never do this
Thinking of selling your home in Durban or KwaZulu-Natal? Choosing the right asking price is one of the most important decisions you will make during the selling process.
Every homeowner understandably wants to achieve the highest possible selling price. Your property may represent years of investment, improvements, memories and financial commitment.
However, there is an important difference between achieving the highest possible selling price and simply choosing the highest possible asking price.
When a home is priced substantially above what comparable properties are selling for, the strategy can work against the seller. Instead of creating room for negotiation, overpricing can reduce buyer interest, extend the marketing period and ultimately weaken your negotiating position.
Here are 10 reasons why overpricing your property could cost you time, buyers and money.
1. Fewer Buyers Will Find Your Property
Most buyers begin their property search with a specific budget. When searching online property portals, buyers normally choose a minimum and maximum purchase price. Property alerts and estate agent databases are often filtered in exactly the same way.
This means that an overpriced property can completely miss the buyers who should actually be viewing it. For example, imagine the realistic market value of your home is approximately R2.9 million.
A serious buyer may search for properties between R2.5 million and R3 million. If the seller decides to advertise the property at R3.3 million to "test the market", that buyer may never even see the listing.
Ironically, the very buyer who may have purchased the property has been removed from the audience. A well-researched asking price helps place your property in front of the largest possible number of qualified and financially capable buyers.
2. Your Property Could Take Much Longer to Sell
Price is one of the first things buyers compare when looking at property for sale. When a home represents reasonable value compared with similar properties in the same neighbourhood, buyers are more likely to arrange a viewing and consider submitting an offer.
An overpriced property often receives a very different response. Buyers may like the home but decide that another property offers better value for money. The result can be weeks or months of limited enquiries, fewer viewings and no meaningful offers.
Eventually the seller may need to reduce the asking price anyway. Unfortunately, by that stage valuable marketing time and buyer interest may already have been lost.
3. Your Property Listing Can Become Stale
Today's buyers have access to more property information than ever before. Serious buyers often search property portals several times a week and quickly start recognising properties that have been advertised for extended periods.
If the same property keeps appearing month after month, buyers may begin asking questions:
- Why hasn't this property sold?
- Is there something wrong with the house?
- Has a previous sale fallen through?
- Is the seller unrealistic?
- Is there a problem that other buyers have discovered?
There may be absolutely nothing wrong with the property. However, a long marketing period can create unnecessary doubt and change how buyers perceive the listing.
Instead of appearing desirable, the home can gradually become known as "the property that has been for sale forever."
4. You Waste the Most Important Marketing Period
One of the strongest advantages your property will ever have is being new to the market. When a new home is listed, it is immediately presented to active buyers who may have been waiting weeks or months for the right property to become available.
These buyers may already have viewed competing homes and could be ready to make a decision quickly. This initial marketing period is extremely valuable. If your property enters the market substantially overpriced, serious buyers may immediately dismiss it.
Reducing the asking price several weeks later does not always recreate the excitement of the original launch. By then, some buyers may have purchased elsewhere and others may already have mentally ruled the property out.
You only get one opportunity to launch a property as a brand-new listing.
5. Buyers May Submit More Aggressive Offers
Many sellers believe that adding a large amount to the asking price gives them additional negotiating room. A small negotiating margin can certainly be sensible but there is a point where negotiating room becomes overpricing.
If buyers believe the asking price is unrealistic, they may assume the seller expects significant negotiation. Instead of making an offer close to the asking price, they may submit a considerably lower offer.
The situation becomes even more difficult when a property has been on the market for several months. Buyers may assume the seller is becoming increasingly motivated and deliberately submit a low offer to test how urgently the owner wants to sell.
A correctly positioned property can have the opposite effect. If several buyers recognise good value at the same time, increased competition can strengthen the seller's negotiating position.
6. You Could Help Your Neighbour Sell Their Property
Buyers rarely evaluate a property in isolation. They compare it with every other suitable property available within their preferred area and budget.
They compare:
- Location
- Property size
- Land size
- Condition
- Bedrooms and bathrooms
- Finishes
- Security
- Views
- Estate or complex facilities
- Levies and rates
- Asking price
Imagine three relatively similar homes are available in the same area.
Property A is listed at R2.95 million.
Property B is listed at R3.05 million.
Your property is listed at R3.45 million.
Instead of convincing buyers that your home is worth more, your asking price may simply make Properties A and B look like excellent value.
In effect, your overpriced property can become a marketing tool for your competition.
7. Overpricing Could Ultimately Result in a Lower Selling Price
This is one of the biggest risks homeowners face when testing the market at an unrealistic price.
The assumption is usually:
"Let's start high. We can always reduce the price later."
Technically, that is true but the market does not necessarily forget the original asking price or the length of time the property has been advertised.
A correctly priced home may generate several enquiries and multiple viewings within a relatively short period. Where several buyers are interested simultaneously, the seller has considerably greater negotiating power. An overpriced property may receive very little interest.
After several months, the seller reduces the asking price. Then reduces it again. Eventually the property reaches the value at which it probably should have entered the market originally.
By then, however, buyers may see an opportunity to negotiate aggressively. The unfortunate result can be a final selling price lower than what could potentially have been achieved had the property been positioned correctly from the beginning.
8. Multiple Price Reductions Can Create the Wrong Impression
Price adjustments are sometimes necessary. Markets change, seller circumstances change and new comparable sales can provide additional information about property values. However, repeated price reductions can negatively affect buyer psychology.
Consider a property that starts at:
R4,200,000
Then drops to:
R3,995,000
Then:
R3,750,000
And eventually:
R3,500,000.
Some buyers may begin wondering whether another price reduction is coming. Instead of making an offer, they wait. Other buyers may conclude that the owner urgently needs to sell and submit an offer substantially below the revised asking price.
Repeated reductions can therefore shift negotiating power away from the seller and towards the buyer.
9. The Bank May Not Agree With the Purchase Price
Finding a buyer willing to pay your asking price does not necessarily mean the transaction is guaranteed to proceed. If the purchaser requires finance, the bank may conduct its own property valuation before approving the home loan. The bank needs to determine whether the property's value reasonably supports the amount being financed.
For example:
A buyer agrees to purchase your property for R3.5 million.
The bank's assessment suggests a value closer to R3.2 million.
The purchaser may then need to contribute additional cash towards the purchase. Not every buyer has hundreds of thousands of rand readily available to fund a valuation shortfall. Depending on the conditions contained in the sale agreement and the purchaser's financial position, financing difficulties could place the transaction at risk.
A realistic market-related selling price can reduce the likelihood of this becoming a problem.
10. You Could Delay Your Own Financial and Lifestyle Plans
There is usually a reason why someone decides to sell their home.
You may want to:
- Purchase another property
- Relocate for work
- Move closer to family
- Downsize
- Emigrate
- Access equity
- Settle debt
- Invest elsewhere
- Move into an estate or retirement development
If an unrealistic asking price causes the property to remain unsold for months, all of those plans may be delayed.
There is also a financial cost associated with holding onto a property longer than necessary.
You may continue paying:
- Bond repayments
- Municipal rates
- Estate or sectional title levies
- Insurance
- Security
- Garden and pool maintenance
- General property maintenance
When these additional costs are considered, holding out for an unrealistic selling price can become considerably more expensive than accepting a good market-related offer earlier.
How Much Is My Property Worth?
This is one of the most common questions South African homeowners ask before selling:
"How much is my house worth?"
The answer should never be based purely on what neighbouring properties are advertised for.
There is a major difference between an asking price and a selling price.
A professional property valuation or Comparative Market Analysis (CMA) should consider a combination of market evidence, including:
- Recent confirmed property sales in your area
- Similar homes currently for sale
- Properties that have been on the market for extended periods
- Property size
- Land size
- Location within the suburb or estate
- Condition and quality of finishes
- Renovations and improvements
- Views, privacy and orientation
- Security
- Estate or complex amenities
- Current buyer demand
- Prevailing property market conditions
A professional property practitioner should be able to explain the recommended selling range using genuine market evidence. A valuation should not simply be the highest number an estate agent believes a homeowner wants to hear.
Should I Choose the Estate Agent Who Gives Me the Highest Valuation?
Not necessarily. When interviewing estate agents, homeowners sometimes assume that the practitioner suggesting the highest asking price is the agent most likely to achieve the best result.
Unfortunately, an inflated valuation can sometimes be used simply to secure a mandate. Once the property has been listed and receives little interest, the seller may then be encouraged to reduce the price.
A good property practitioner should be prepared to have an honest conversation about value, even when that conversation is not necessarily what the homeowner hoped to hear.
The important question is not:
"Which agent gave me the highest valuation?"
The better question is:
"Which agent can provide the strongest evidence supporting their valuation?"
What Is the Best Asking Price for My Property?
The goal should not be to find the lowest asking price. Nor should it simply be to choose the highest figure you hope someone might eventually pay. The objective is to position the property within a range where buyers recognise value while still protecting the seller's financial interests.
Good pricing creates activity.
Activity creates viewings.
Viewings create offers.
Multiple interested buyers create negotiating power.
That is the position every seller wants to be in.
The Highest Asking Price Does Not Always Produce the Highest Selling Price
Ultimately, homeowners need to distinguish between asking price and market value. A homeowner can choose any asking price they wish.
But buyers will ultimately decide whether that price represents value compared with the alternatives available to them.
This leads to one of the most important principles in residential property:
The seller does not determine the market value of a property, and neither does the estate agent. The market does.
The role of an experienced property practitioner is to interpret that market correctly and position your home so that it attracts the greatest possible level of genuine buyer interest. When selling property, the objective should never simply be to achieve the highest asking price.
The objective is to achieve the best possible selling price.
Frequently Asked Questions About Property Pricing
Should I list my property higher to leave room for negotiation?
A reasonable negotiating margin can make sense, but the asking price still needs to remain within a range buyers consider realistic. Pricing substantially above comparable market value can reduce enquiries before negotiations even begin.
How do I know what my property is worth?
The best starting point is a professional Comparative Market Analysis. This compares your property with recent sales and competing homes while accounting for factors such as location, size, condition, improvements and current buyer demand.
Can overpricing my home make it sell for less?
Potentially, yes. A property that remains unsold for an extended period can lose its initial marketing momentum. If repeated price reductions follow, buyers may gain additional negotiating leverage.
Is an online property valuation accurate?
Online valuation tools can provide a useful indication, but they may not account for the individual characteristics of your property. Renovations, condition, views, positioning, finishes and location within a neighbourhood can significantly influence value.
Should I get more than one property valuation?
Obtaining more than one professional opinion can be helpful. However, sellers should compare the evidence supporting each valuation rather than simply selecting whichever agent provides the highest figure.
What is a Comparative Market Analysis?
A Comparative Market Analysis, commonly referred to as a CMA, is an assessment prepared by a property practitioner comparing your home with similar properties that have recently sold, are currently for sale or have struggled to sell.
Thinking of Selling Your Property in Durban or KwaZulu-Natal?
If you're considering selling your home, one of the most valuable things you can do before placing it on the market is understand its realistic market value. Hawkstone Realty can provide a professional Comparative Market Analysis based on relevant property sales, competing listings and current buyer activity.
Whether you're considering selling now or simply wondering "how much is my property worth?", obtaining an informed market assessment can help you make better decisions.
Our focus is not simply on listing property. It is about positioning each home correctly, presenting it professionally and developing a marketing strategy designed to attract serious buyers.
Looking to sell your property in Durban, the Upper Highway or KwaZulu-Natal?
Contact Hawkstone Realty to arrange a professional property valuation and Comparative Market Analysis.
Disclaimer: Property values, buyer demand and market conditions vary according to location, property type and prevailing economic conditions. Any property valuation or Comparative Market Analysis should be considered together with current market evidence and the individual characteristics of the property.