The Risks of an Overestimated Valuation for Your Real Estate Sale
When it comes to selling real estate, setting the right price is essential. Yet, some owners give in to the temptation of overvaluing their property. But this strategy can backfire. Here's why.
1. What is Property Overvaluation?
Real estate overvaluation consists of setting a sale price higher than the property's real value. This can be due to sentimental reasons (renovations done, memories attached to the property), a desire to maximize gain, or a misunderstanding of market trends. However, this practice carries several major risks.
2. The Risks of Overvaluation
Discouraging Potential Buyers
In a context where borrowing rates are high, buyers are particularly attentive to property value for money. A property listed at too high a price can deter serious buyers who will prefer to turn to properties at market price. Additionally, an overpriced property doesn't generate offers, which can considerably extend the sale period.
Losing Credibility
A property that stays too long on the market becomes suspicious in buyers' eyes. Viewings become scarce, and potential buyers wonder if the property has hidden defects or is simply overvalued. This phenomenon is even more pronounced when the property has been listed on multiple platforms for months, or even years.
Selling Below the Initial Value
When the property doesn't find a buyer at the initially requested price, the seller is often forced to lower the price. However, this reduction may come too late and lead to a sale at a price below its real value. Worse still, a property that has been subject to several successive price drops loses its attractiveness and can end up selling well below its first estimate.
Jeopardizing a Future Purchase Project
If the seller already has an acquisition project underway, a long sale can put them in financial difficulty. In the case of a bridging loan, the risk is even greater, as the seller could find themselves with two properties to finance. This double burden can prove particularly heavy, especially if the initial sale takes time to materialize.
3. How to Set the Right Price?
- To succeed in a real estate sale, it's essential to set a price in line with the local market. Here are some tips for positioning your property well:
- Compare prices of similar properties: Analyze recent sales of comparable properties in your neighborhood or area. Real estate platforms and local agencies can provide you with precise information.
- Analyze the property's characteristics: Living area, general condition, equipment (pool, terrace, garden), view, exposure... All these elements influence the value of a property.
- Get a property valuation from our agency: Using our professional services for a valuation is a strategic approach. We have the tools and experience needed to establish a realistic and substantiated estimate.
- Observe price thresholds: At certain price ranges, a difference of a few thousand euros can tip a property from one price category to another. For example, a property listed at €252,000 could generate fewer viewings than one at €249,000, simply because it exceeds a psychological threshold for buyers.
By following these recommendations, we will optimize your chances of selling quickly and at the best price, while avoiding the pitfalls of overvaluation. Take time to objectively evaluate your property and listen to expert advice to maximize your chances of success.
Keywords:
Property valuation, Sale price