The idea that you have to put a lead price on a property – inflate the asking price so the buyers offer close to what you want – is nonsense. The opposite is actually true.

Put the right price on and the buyers engage. Inflate the price and they vote with their feet. If buyers don’t engage with you, time kicks in and nothing happens. You see “sold” signs going up all around you but no offers are coming in on yours.

You may even get lots of people through your open days each week but still nothing happens. You get grizzly, the agents get grizzly and they end up having conversation after conversation to chip, chip away at the price over time until you arrive at the reaction zone. This advice flies in the face of what sellers often want to do. They say, “We need this much because we’re building.” “We need this much because we’re separating and only get 50% each.”  “We paid this or that three years ago.”

Put bluntly, the market doesn’t give a damn about what sellers need to get. It’s just that simple. This is just emotional white noise to them. In the end, the market will price your home by comparison to others and if the gap is too high — that is, 3-5% above the estimated market value — buyers won’t engage. It’s really just that simple. I will look at how this market pricing works in the next session.

There’s an even more serious reason for sticking to a realistic asking price. There will be buyers out there waiting for new homes to come onto the market. They are the first through your home. They see it go up on the net they’re the first to act and the first to call. The buyers, well, most of them will come through in those first couple of weeks. If you price your home too high, you will miss them. So pay attention to the gap. The very best way to get maximum money for your home is to do the work, get it priced correctly, put it on close to market value and watch competition take it even higher.

This is also why I say choose the agent first. If they’re working under the pressure of being chosen based on the price they give you, you’re going to damage the whole process from the start. Choose them, appoint them and then do this exercise together.

We’ll look next time at how to estimate the market value of your home.