"I want to list it for R2.5 million just to see what happens. We can always come down later."
If you are a seller, this thought has almost certainly crossed your mind. It seems logical, doesn't it? You don't want to leave money on the table, so you start high. If nobody bites, you lower the price. No harm done.
Except, there is harm done. In fact, "testing the market" is often the most expensive mistake a seller can make.
Here is the psychology behind why overpricing usually results in a lower final sale price than if you had priced it correctly from day one.
1. The "Golden Window" 🌟The moment your property hits Property24 and Private Property, a timer starts. Your listing is fresh. It appears in the "New Alerts" emails of hundreds of serious buyers who have been waiting for a home just like yours. This is your moment of maximum leverage.
If your price is too high, these serious buyers—who know the market well—will scroll right past. They won't even book a viewing. You have just wasted your best chance to create a "bidding war" or get a full-price offer.
2. The "Stigma of Staleness" 🍞Fast forward 60 days. Your house is still on the market because you were "testing" a high price. You finally decide to drop the price to the correct market value.
But now, buyers are suspicious. They look at the listing history and ask: "Why has this house been sitting for 2 months? What's wrong with it?"
Even though the price is now fair, the perception of the home has been damaged. It is "stale."
3. You Help Your Competition Sell 🏠This is the painful truth: When you overprice your home, you become the best marketing tool for your neighbour.
Buyers will go view your home at R2.5m, then walk down the street to view a similar home priced correctly at R2.2m. Your high price makes the neighbour's house look like an absolute bargain. They put in an offer on the other house, and you are left still holding yours.
The Century 21 Strategy 📉📈The data proves that homes priced accurately (or slightly aggressively) generate the most interest in the first 14 days. This competition drives the price up.
"Testing the market" drives buyers away.
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