Why Overpricing Your Home Could Cost You Big Time

In North London’s competitive property market, it can be tricky to know if your home is priced just right. With prices on the rise and fewer homes available, you’d think selling would be easy. But despite an impressive 11.2% year-on-year price increase in May, only 1 in 20 asking prices were slashed by 9%. So, how can you tell if your home has been priced to sell or if it’s destined to languish on property portals? Let’s dive into the dos and don’ts of valuing your home and how to spot the warning signs of an inflated asking price.

The Hidden Cost of Overpricing

It’s tempting to go high with your asking price. After all, what if someone falls in love with your home and is willing to pay way over the odds? Sounds great, right? Well, not quite.

Overpricing your home can cost you and cause a lot of headaches. For starters, fewer buyers will see your home if it’s priced outside their search range on property portals, meaning you miss out on valuable interest. High prices also deter many buyers from even viewing your property, leaving it on the market for too long. Nobody wants their property to linger unsold. It quickly shifts from ‘new and exciting’ to ‘why hasn’t this sold yet?’

Then, you’ll find yourself unable to put an offer in on your dream home because you’re still waiting for yours to sell.

Even if you do manage to secure an offer at a high price, there’s the risk of the mortgage lender or surveyor down-valuing the property. That can lead to last-minute renegotiations. Shrinking your budget for your next home, or worse, the sale falling through altogether. In short, overpricing can turn what should be an exciting time into a frustrating waiting game.

How to Spot an Inflated Valuation

So, how can you tell if your home is priced too high? There are a few tell-tale signs to watch out for:

• If similar homes nearby are being marketed for less, or the ones priced like yours are in more expensive areas or have a bit more space, that’s a red flag.
• Another big clue is a lack of interest. If viewings are scarce, or if people come to view your home but nobody’s returning for a second look, it might be a sign that buyers think your home isn’t offering good value for money.
• And if estate agents’ boards keep switching to ‘sold’ on nearby homes while your ‘for sale’ sign is gathering dust, it’s time to re-evaluate. Buyers know what homes should be selling for. Inflated prices will only slow things down and keep your property on the market longer than necessary.

Beware The “Too Good to Be True” Valuation Trap

We’ve all been there: you’re excited to sell, you meet with a few estate agents, and one comes in with a sky-high valuation. It sounds great on paper. Who wouldn’t want to sell for more than expected? But here’s the catch: sometimes, estate agents will overvalue a property as a tactic to win your business, knowing that it’s unlikely to sell at that price. It’s called “flattering pricing” and while it might feel good in the moment, it can have some serious downsides. Overvaluing might get your home onto the market, but it won’t get it sold. Instead, it can lead to:

• Wasted time: If your home is priced too high, it won’t attract serious buyers. You’ll spend weeks (or even months) waiting for interest that never comes.
• Price reductions: After a long stretch with no offers, you might be forced to reduce the asking price. And nothing screams “desperate” like repeated price cuts.
• Losing momentum: The first few weeks on the market are crucial. If your property is overvalued, it won’t generate the buzz it needs early on, and potential buyers will move on to something else.
• Negative perception: A property that’s been sitting on the market for too long starts to look stale. Buyers might assume there’s something wrong with it. Even if it’s just the price that’s off.

In short, overpricing your home can cost. It might give you a temporary high, but it can quickly lead to frustration, disappointment, and wasted time.

Honest Mistake or Sales Tactic?

Estate agents should always aim high with their valuations. But if one agent is quoting way above everyone else, it’s worth digging a little deeper. Ask how many of their sales go for the asking price or higher, and how often they need to reduce prices before getting a sale.

You should also ask about the average time their listings stay on the market and what percentage of homes end up being withdrawn unsold. These answers will give you a clearer picture of whether the agent is being realistic, or if they’re just trying to get your listing through the door with some sweet talk and high hopes.

You can also check for price reductions and time on market yourself by looking at the property on Rightmove. The listing on Rightmove should indicate when the property was first listed and whether it was reduced and when. You can go one sleuthy step further too by installing the ‘Property Log’ plugin on Google Chrome. Which will show you a list of historic price changes to property listings on Rightmove.

Protect Yourself With a Sensible Contract

Let’s say you go with an agent who’s given you a significantly higher valuation. That’s fine, as long as you protect yourself with a fair contract. First off, negotiate a short initial contract length – something like four weeks is usually enough. You’ll also want to check that the notice period isn’t longer than seven days, so you can move on quickly if things aren’t working out.

Make sure you won’t be on the hook for marketing costs if you decide to switch agents, and get any changes to the contract in writing. If an agent truly believes in their high valuation, they’ll be more than happy to agree to flexible terms. But if they’re pushing for a long-term commitment, it might be a sign that they’re not as confident as they seem.

When to Switch Agents

If your home’s been sitting on the market for a while, you’re probably wondering whether it’s time for a change. Start by having an open and honest conversation with your current agent to see if they can adjust their strategy. But if you’re not convinced, switching agents could give your property the fresh start it needs.

Your home will be re-labelled as a new listing on property portals. Which can generate renewed interest. A new agent will bring fresh energy to the process, and they’ll likely want to update the listing with new photos and maybe even a bit of home staging magic to make your property stand out.

At the end of the day, if your home isn’t getting offers in today’s market, something’s off. With so many buyers out there, your property should be getting plenty of attention. A new agent with a new approach might just be the key to getting things moving again.

Could Your Home be Overvalued?

If your home isn’t selling, or if you’ve received a surprisingly high valuation that doesn’t seem to line up with what’s happening in the market, we’re here to help.

Get in touch with Mark, our Director of Sales, for a fresh opinion, and let’s make sure your home is priced to sell: mark@daviesdavies.co.uk / 0207 272 0986

Get a £50 M&S voucher on us! Simply quote ‘BLOG’ when you contact us, and receive your voucher upon completion.

Contact us:

mark@daviesdavies.co.uk – Sales Director (contact for sales, lettings and new homes)

katrina@daviesdavies.co.uk – Head of Property & Block Management (contact for property and block management)

Davies & Davies Estate Agents, 85 Stroud Green Road, London, N4 3EG

Article & images by Barefaced Studios

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