The dangers of overpricing your home!  

In the 2010s, a report by RP Data demonstrated a compelling correlation between days on market and the discounts required to sell properties. The study showed that when homes sold quickly, within 14 days, the average discount from the original asking price was just 1.3%, and further negotiated discounts were as low as 0.3%. However, when the average days on market stretched to 64 days, the discounts skyrocketed to 8.3% and 5.3%, respectively. For a $600,000 property, this could mean a financial difference of $30,000 to $50,000—highlighting the critical importance of strategic pricing and timing.

Having launched my real estate career in 1994, I’ve seen firsthand the costly effects of prolonged market exposure. In earlier years, without today’s data insights, overpriced properties often lingered, with sellers ultimately accepting lower offers than those received early on. Fortunately, we now have immediate access to this data, which unequivocally shows that overpricing can, in most cases, lead to selling for less in the long run.

While occasional growth markets may offer opportunities to push pricing boundaries, this is the exception, not the rule. Even during such times, the benefits often only apply if you’re exiting the market or downsizing. If upgrading, the financial gap often widens, eroding any perceived gain. For instance, a 10% market increase on an $800,000 property moving to a $1,000,000 home would result in an additional $20,000 cost.

In a balanced market, strategic pricing and competition are key. Overpricing typically discourages multiple buyers from engaging, while appropriately priced homes can spark competitive bidding, driving up the final price. Conversely, in declining markets, overpricing risks “chasing the market down,” leading to significant losses. When the market dips, it often does so sharply, and responding proactively to these changes can protect your capital value.

As an experienced agent, I believe successful outcomes stem from a blend of deep market analysis and exceptional negotiation skills. While many agents are evaluated solely in the midst of negotiations, there’s an earlier indicator of their capabilities: how well they navigate the appraisal process and communicate what you need to hear—not just what you want to hear. At Xceed, we prioritize this skill when selecting and coaching our team. Our agents are rigorously trained to position your property competitively and negotiate effectively to secure the best outcomes for you.

If you’d like to see how we can help you achieve your property goals, don’t hesitate to reach out at hello@xceedre.com.au or 0413833332. Let’s ensure your next move is the right one!