Homeowners hoping to maximise their sale price by aiming high could end up worse off, a mortgage expert has warned. Many sellers believe listing a property above its true value gives them room to negotiate down. However, industry expert Shaun Sturgess says this strategy can often backfire, particularly in a slower, more price-sensitive housing market.
The Risk of Overpricing
According to Sturgess, overpricing a home can deter buyers from the outset and leave properties lingering unsold. He explained: "Overpricing rarely gets you more. More often, it gets you stuck. A home listed above market value tends to sit there while sensibly priced properties around it sell. The longer it lingers, the more buyers start assuming something is wrong with it."
Critical First Weeks
Sturgess, who is also director of Swansea-based Sturgess Mortgage Solutions, emphasised that the first few weeks after a property hits the market are crucial. This period attracts the most attention and serious enquiries. He said: "The first two to three weeks are everything. That is when you get the most views and the most genuine interest. If you pitch too high and waste that initial momentum, it can be very difficult to recover later."
Price Reductions Weaken Position
Sellers who initially overprice often find themselves needing to reduce their asking price, a move that can weaken their negotiating position. Sturgess warned: "Once a property gets a 'reduced' tag attached to it, buyers immediately start smelling weakness. They often come in with even lower offers than they would have made originally because they assume the seller is now desperate or under pressure."
He added that in some cases, sellers who start too high ultimately accept less than they might have achieved if they had priced their home realistically from the beginning.
Mortgage Valuation Complications
There can also be complications when it comes to mortgage valuations. Even if a buyer agrees to an inflated price, lenders must carry out their own assessment of the property's value before approving a loan. If the valuation comes in lower than the agreed price, known as a 'down valuation', buyers may need to find a larger deposit or the sale could fall through entirely.
Sturgess said: "Inflated valuations can completely sink a sale. A buyer might love the property and agree the price, but if the lender values it lower, the numbers no longer work and months can end up wasted for everyone involved."
Beware of Unrealistic Agent Valuations
He also urged sellers to be wary of estate agents offering unrealistically high valuations in order to win business. Sturgess added: "Some agents are more interested in winning the instruction than actually achieving the sale. Plenty will flatter vendors with wildly optimistic figures just to secure a contract, particularly larger corporate agencies working to sales targets."
Correct Pricing Generates Momentum
Instead, he said pricing a property correctly from the outset can generate stronger interest and even drive competition between buyers. He said: "If a property is priced properly, or even slightly keenly, it can create real momentum. You get more viewings, stronger competition and sometimes offers at or above asking price. Going for gold from day one often achieves the exact opposite."
