Accurately pricing your home is crucial to the selling process and should be done correctly from the start. One common mistake that we see time and time again is sellers requesting to list their property over their market price. In our last quarterly market report, we saw the average discount levels between the listed sales price and the agreed sales price reduce by almost a full percentage point to 5.7% from the same time last year (June 2022) and are within their lowest levels for the past 5 years.
In this article, we’ll explore the reasons why overpricing your property when listing it for sale can be a costly error in the Barbados real estate market.
1. Limited Buyer Interest:
Overpricing your property can significantly limit the pool of potential buyers and price them out as well. In Barbados, like many other markets, buyers have access to a wealth of information and resources, allowing them to quickly assess the fair market value of a property. When a property is overpriced, it is often disregarded by discerning buyers who recognize the discrepancy between the asking price and market value.
2. Extended Time on the Market:
Overpriced properties tend to linger on the market longer than competitively priced ones. Prolonged time on the market can be a disadvantage as potential buyers may assume there is something wrong with the property, further decreasing its appeal.
3. Raising Red Flags:
Overpricing may eventually lead you to implement a price drop. This raises red flags with prospective buyers.
4. Missed Opportunities:
Overpricing can lead to missed opportunities from the right buyer seeing your property. By pricing your property at the recommended amount by our agents, you increase the chances of receiving offers and closing the deal within a reasonable timeframe.
5. Costly Carrying Expenses:
Each day a property stays available for sale, it accumulates ongoing costs like property taxes, upkeep, and insurance, with the latter two specifically applicable to improved properties.
While it might be tempting to set a high asking price for your property, overpricing it can have significant drawbacks. Sellers should carefully consider the local market conditions and work closely with experienced real estate agents who can provide expert guidance on pricing. By pricing your property accurately, you increase the chances of attracting motivated buyers, selling within a reasonable time frame, and securing a favorable deal, ultimately reaping the benefits of your investment.