The importance of setting the right price when selling a property
Setting the right price when selling a property is crucial to avoid long periods on the market and losing opportunities. Find out why an accurate price is key to a fast and successful sale, and how at Portal Menorca, we provide personalized valuations to ensure it. Keep reading to learn more!
When we decide to sell a property, one of the most crucial steps is to set the right selling price. An incorrectly set price can lead to a series of issues that not only hinder the sale but could also damage the property’s perception in the market. In this article, we explore why it is essential to establish a realistic price from the beginning and how it can influence the sales process:
1. Longer Time on the Market and Less Initial Interest:
When a property is overpriced or priced higher than the market deems appropriate, it tends to take longer to sell. This creates a negative effect: the property loses appeal and, with prolonged market presence, begins to be perceived as less desirable. The number of visits decreases, and trust fades, which can scare off potential buyers.
2. Additional costs and lost opportunities:
The longer a property stays on the market, the higher the maintenance costs, taxes, and insurance. Moreover, as time passes, the opportunity to obtain a higher price fades. This can result in both a loss in the price expected and missed sales opportunities as months go by.
3. Filtering on real estate portals:
Nowadays, many buyers use price filters on real estate portals, and an excessive price can prevent your property from even appearing in the searches they make. This reduces the property’s visibility and decreases the chances of it being seen by the right buyer.
4. Negative impact on market perception and future price reductions:
If a property remains unsold for a long time, it creates the perception that something is wrong with it. Additionally, if the price is eventually reduced, it may be seen as a sign of desperation to sell, further harming the property’s image in the market.
5. Unfavorable comparisons and lost competition
If your property is priced higher than similar properties in the same area, buyers may find it less attractive, even if the property appears to be of similar quality. Market competition is fierce, and a high price can cause sales to be lost to better-priced properties.
6. Difficulties in obtaining financing:
An inflated price can also make it harder for buyers to obtain financing. Financial institutions grant mortgages based on the actual market value, not on the seller’s asking price. Therefore, an unrealistic price can prevent buyers from accessing the necessary loans to acquire the property.
7. Mismatch in marketing strategy:
If the property price is too high, marketing strategies may not work properly. Advertising campaigns may attract an audience that is unwilling to pay what is being asked, limiting the effectiveness of sales efforts.
8. Difficulty in attracting serious buyers:
If a property is overpriced, serious buyers who are genuinely interested in that area or type of property will likely overlook it. Unrealistic price expectations may cause the property to go unnoticed by the most serious buyers.
A real case: The importance of an appropriate selling price.
Recently, at Portal Menorca, we had a case that perfectly illustrates the importance of setting the right price. A property owner approached us for a valuation with the intention of selling. After conducting a detailed and personalized analysis, we offered a price in line with the current market. However, the owner believed they could ask for more.
Another agency on the island accepted the price the owner had set and began marketing the property. What happened? After six to eight months on the market, with few visits and no concrete offers, the owner came back to Portal Menorca and accepted our initial valuation. Once the price was adjusted, the property began to generate interest and was eventually sold in a reasonable time.
The conclusion is clear: if the price isn’t set correctly from the start, there is a risk of “burning” the property in the market, causing it to lose value and making it more difficult to sell.
Personalized valuations: The key to a successful selling price
At Portal Menorca, we conduct personalized valuations for all properties we take on for sale. We base our valuations on factors such as location, property features, condition, improvements made, neighborhood comparisons, and, above all, we always conduct an in-person visit. Only then can we accurately determine the market value of a property and set a selling price that attracts the ideal buyers.
While online valuation tools, like the one we offer at Portal Menorca, can be useful as a starting point, they are not enough on their own. These automated valuations can be approximate, but a detailed and personalized study is necessary to obtain a realistic valuation in line with current market conditions. That’s why we encourage all property owners, whether they already have their property on the market or are thinking of listing it, to contact us for a second opinion on their property’s valuation, with no obligation.
