No, you shouldn't over-value your property!

We have to value properties several times a week. Unfortunately, we sometimes have to deal with recalcitrant owners who don't want to hear our valuations.

The arguments put forward by the sellers are numerous, and they always have the best reasons to believe their property is worth more that the others. There is also a tough competition between real estates, and unfortunately, some of them don't hesitate to over-value properties in the hope of getting the mandate (I've never understood this strategy, as we're paid on success basis!). In the end, if the price is too high, there's a good chance that the property will remain on the market for a long time, and that it will sell for less than it could have if it had been presented at the right price from the beginning.

Here are the main reasons why you should never overestimate the value of a property:

1. Risk of missing the launch phase, which is the most important: when a property arrives on the market, it attracts buyers who have been actively looking for some time. By overpricing it, they immediately move away from it, whereas these same buyers might have been interested in it if it had been advertised at a fairer price;

   
   

2. The property will remain on the market for (too) long, and that sends a negative signal. In all cases, property investment is an important purchase, whatever the global budget. If the property has been on the market for a long time, do you think buyers can be confident in their decision to buy? They'll probably have the impression that they're buying a product that isn't selling.

   
   

3. Negotiation becomes a game of chance! If you move too far away from the asking price, if a potential buyer expresses an interest, there is a risk that he will offer a much lower price, or lose interest in the property altogether. There is less chance of raising the price, because the psychological price has been set much lower than the fair price.

   
   

4. You automatically eliminate a certain number of buyers, who won't even look at the ad, even though the property could have interested them at its fair price.

   
   

5. The buyer may not be able to obtain the necessary financing. Banks know market prices. If your buyer needs a bank loan, which is the majority of cases, he or she may not be able to obtain the loan because the bank will not take the risk of granting a loan for a property that is too expensive.

   
   

6. Successive price reductions are a very bad signal. Buyers may believe that the seller is in difficulty or that the property has defects. Here too, there is a real risk of selling at a lower price than would have been the case from the outset.

   
   

   To summarize, there are three important points to remember when estimating your property:

• Thanks to the Internet and access to market information on properties for sale and properties sold, buyers are well informed and know what property prices are, even if they don't have the means of comparison that an estate agent would have;

  
  

• If you're not sure, or if the information provided by an estate agent isn't clear enough, don't hesitate to ask for several estimates. But don't necessarily trust the best one, even if it's a reputable agency. Get informed, like your buyers, and compare your property with what's available on the market!

  
  

• Choose an estate agent with knowledge of the area: he or she knows property prices, has comparative data and understands the psychology of customers in the area. Don't forget that their job, what keeps them busy and motivated every day, is to go and look at properties, find out about them, estimate, negotiate and sell!