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Why overvaluing your property costs you in the long run

In this three-minute
read, we look at why setting an unrealistic asking price can delay and even
derail the sale of your home.

If you’re planning
on putting your property on the market, there’s one key piece of advice to
remember.

It’s not a slick
statement from a TED Talk or the title of a trendy self-help book. It’s an
age-old saying that your Nana probably used: “If it’s too good to be true, then
it probably is.”

Vendors should keep
this in mind when looking for an agent to sell their property because
there are unscrupulous players out there who deliberately inflate valuations to
secure an instruction.

They will say just
about anything to lock you into a sole agency agreement.

It’s a self-centred
strategy that is about lining the agent’s pockets, not serving the customer,
and it can have a disastrous impact.

Here are five
reasons why overvaluing your property can prove costly.

Lengthy
delays

Moving home,
especially if you are in a chain, can be a convoluted process at the best of
times.

Starting on the wrong
foot, with a totally unrealistic price, complicates things.

According to
consumer watchdog Which?, overvalued homes take on average up to two months
longer to sell than other properties.

In most
overvaluation cases, reality kicks in after a month or two, and the vendor ends
up dropping to a more realistic price (the price they probably should have asked
for initially). All overvaluing achieves is a delay.

It
deters buyers

If you overvalue
your property, expect viewings to be slow or non-existent. A considerable
amount of information about property sales is available online these days,
meaning most buyers know what property in their desired area is worth. They can
spot a rip-off and will steer clear or drive a hard bargain.

Buyers also tend to
filter their online property searches by price, so if you’ve inflated the
asking price, it might not even register in their search.

It
messes with your next move

Imagine this: you
find your dream home, make an offer, and it’s accepted. Hurrah! Now, all you must
do is sell your existing property. The problem is the over-the-top asking price
deters buyers, leaving you in limbo.

Soon, the impatient
owners of your dream home ditch you for a buyer who is ready to move and you’re
back to square one.

Your
mortgage deal is threatened

When lenders
calculate how much you can borrow, they factor in what you expect to get for
your existing property. So, if an agent promises to get £400,000 for your home,
and you wind up dropping to £340,000, it leaves a black hole in your finances.

All your
calculations are now in tatters, and you must start again with downgraded
expectations.

Trust
is key

For most people,
selling a home is the largest financial transaction of their life. It’s essential
to go through the process with someone you trust – not someone who has trapped
you into a lengthy agreement by deliberately misleading you.

Before you commit to
an agent, do your research, ask for word of mouth recommendations, and
prioritise professionalism and honesty over flashy claims.

Here
at Holland Properties, we promise to give you honest, expert advice about selling
your home.

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