Real Estate ProfessionalsSelling

Real Estate’s Dirty Little Secret (And Why It’s Costing You Money)

Story Highlights
  • The Psychology of Pricing: How Buyers Really Think (and Click)
  • Online Listings: Why the Right Price Gets You Seen First
  • The Real Cost to You as the Seller
  • Seller’s Self-Check: Is Your Home Priced Too High?
  • Why Some Agents Don’t Push Back
  • How to Avoid the Trap: Price Smart from the Start

When it comes time to sell, most homeowners dream of getting top dollar – and who can blame them? After all, your property is one of your most valuable assets. However, what many sellers don’t realise is that overpricing a property can actually lead to losing money in the long run – and this is Real Estate’s Dirty Little Secret that few talk about. While it might seem like a good strategy to list higher, it can backfire in ways you might not expect.

Here’s something many sellers don’t know: some agents, eager to secure listings, may agree to price properties higher than they realistically should be. Why? To win your business and keep you satisfied in the short term – even if it means your property could languish on the market, eventually drop in price, and result in a lower final sale price.

Let’s unpack what’s really at stake.

The Psychology of Pricing: How Buyers Really Think (and Click)

Buyers are savvy. They compare homes, apply filters, and often look at dozens of listings online. Buyers don’t just look at your home – they compare it. Their decisions are shaped by powerful psychological patterns that influence what feels like “good value.”

Here are three critical effects you need to understand:

  • Anchoring: Buyers mentally compare your home to the first similar one they saw – often the best deal they’ve found so far. If your price is significantly higher, it sets off alarm bells, and they’re unlikely to come back.
  • Loss Aversion: Most buyers fear overpaying more than they’re excited by finding the perfect home. If your price seems inflated, they’ll avoid the risk – even if the home fits their wishlist.
  • Search Filter Blind Spots: If you’re priced just above a common price filter (e.g., R1.5 million), your home might never even appear in search results. Buyers filtering by budget simply won’t see your listing, no matter how beautiful it is.

These pricing blind spots are subtle, but they can dramatically affect visibility, perceived value, and buyer engagement. That’s why even a small pricing tweak can make a big difference in getting clicks – and offers. This is where online listings play a pivotal role.

Online Listings: Why the Right Price Gets You Seen First

Once buyers start browsing online, they continue applying the same psychological factors that shaped their initial price comparison. They actively filter listings, comparing homes within their price range and quickly determining which ones stand out. If your home’s price is too high or just slightly off, it might not even appear on their radar.

While price is the most important factor, it’s not the only element that makes a listing successful. However, pricing your home correctly makes all other aspects of the listing more effective. Here’s why:

  • High-quality, well-lit photos: A well-priced home is more likely to get clicked on, giving photos a higher chance to make a lasting impression. Buyers are more likely to linger on listings they view as a good deal, which allows your photos to shine.
  • Accurate, keyword-rich descriptions: Buyers are more engaged with reasonably priced listings, meaning they’re more likely to read through the full description, where you can highlight key features like location and lifestyle benefits.
  • SEO-optimised listing titles: Homes priced correctly tend to attract more consistent clicks, boosting their visibility in search results. A title like “Modern 3-Bed in Lonehill with Garden and Solar” will gain traction when the price isn’t a turn-off.
  • Video tours or virtual walkthroughs: When buyers are already interested due to an attractive price, video content becomes more effective. High-quality videos are best appreciated when people are excited about the value they see.

In short, when your home is priced right, every part of your listing – photos, descriptions, titles, and video – works harder to convert clicks into enquiries.

Online platforms use algorithms to rank listings based on user engagement, such as clicks, time spent on the page, and enquiry volume. Homes that are priced appropriately tend to attract more clicks, staying at the top of search results. In contrast, overpriced homes receive fewer views, leading to decreased visibility over time and creating a feedback loop that makes them even harder to sell.

💡 Compelling insight: Homes that receive fewer clicks in their first 7–10 days online often experience a sharp drop in listing rank, leading to a 40–60% decrease in subsequent visibility.
This “listing fatigue” can be difficult to recover from, even with price corrections later.

🌶 The takeaway? Even the best marketing can’t overcome a bad price. When your home is priced correctly from day one, all elements of your listing – from photos to descriptions – work together to attract more clicks and convert them into enquiries.

The Real Cost to You as the Seller

1. You lose your golden window of attention

    When a property is priced too high, it can quickly lose its initial appeal. Homes receive the most interest when they are first listed, and if a property is overpriced, it will sit on the market for longer. According to a report by Rawson Property Group, properties that are overpriced tend to stay on the market for 60–90 days longer than those that are priced correctly.

    Extended time on the market can cause your property to lose its “new listing” appeal, making buyers wonder why it hasn’t sold. Over time, this can lead to a perception that something is wrong with the property – even if that’s not the case.

    2. Overpriced homes sell for less

      When your property stays on the market too long, it can lead to the “stale listing” effect. Buyers may begin to assume the property isn’t worth its asking price, and even if they make an offer, it will likely be lower than it would have been had the property been priced more competitively from the beginning. According to Lightstone, properties that linger on the market for over 90 days often receive offers 5–10% lower than their original asking price.

      Even when a price reduction is eventually made, the property may still be seen as overpriced compared to newer listings that offer better value.

      3. Carrying costs quietly eat away at your profits

        While your property sits on the market, you continue to incur carrying costs – such as bond repayments, property taxes, and utility costs. For sellers with urgent financial needs, these costs can quickly add up. For example, in South Africa, the average home loan interest rate is currently 11.00%, and for a home worth R1.5 million, the monthly bond repayment can exceed R14,000. Prolonged market time means more months of these payments, eating into your potential profits.

        4. Missed opportunities

          If you’re overpricing your property, it’s possible that the right buyers will never even see it. Most buyers filter properties by price when searching online, and if your home is priced higher than others in the same area, it may never make it into their search results. This limits the pool of potential buyers, reducing the chances of a timely sale at a good price.

          Seller’s Self-Check: Is Your Home Priced Too High?

          Use this quick checklist to self-assess your listing:

          • Has your home been listed for more than 30 days without serious offers?
          • Have you had fewer than five viewings in the last month?
          • Are similar homes nearby selling faster and for less?
          • Have multiple agents or buyers suggested your price is high?
          • Have you already lowered the price once or more?

          💡 If you checked three or more, it may be time to request a Comparative Market Analysis and revisit your pricing strategy.

          Why Some Agents Don’t Push Back

          Real Estate’s Dirty Little Secret becomes more apparent when you realise that, while many ethical agents advise sellers to price realistically, others take overpriced listings because:

          • They’d rather have the listing than let a competitor take it.
          • They assume the seller will “come around” after the home fails to sell.
          • They value the exposure to potential buyers more than the result for the current seller.

          💡 This isn’t always malicious. Sometimes agents genuinely believe they can work the market or market the property creatively. But the fact remains: sellers take the risk; agents reap early benefits.

          How to Avoid the Trap: Price Smart from the Start

          1. Conduct a Comparative Market Analysis (CMA)

          A CMA is a powerful tool that helps you understand the going rate for properties similar to yours in your area. By comparing your home to recently sold homes with similar characteristics – such as size, location, and condition – you can arrive at a realistic price that reflects current market trends. According to Prop Data, the average price of residential properties in South Africa decreased by 3.2% in the last quarter, signalling a market that requires sellers to be competitive in their pricing.

          2. Consult Multiple Agents for an Honest Valuation

          One of the most important steps in pricing your property correctly is consulting with multiple agents to get their insights. A professional estate agent can provide valuable advice based on their local market expertise, but be wary of agents who overestimate the value of your property just to win your listing. If an agent is suggesting a price that seems too high, ask for a detailed rationale behind their pricing suggestion. Look for agents who are transparent about current market conditions and who will advise you on a fair and achievable price.

          3. Understand the Market Conditions

          Market conditions play a critical role in determining your property’s value. In South Africa, the property market has been influenced by various factors, including interest rates, economic uncertainty, and buyer sentiment. According to the FNB Property Barometer, the market has shown signs of slowing, with lower demand for luxury homes and more focus on affordable housing. A good agent will take these market conditions into account to help you set a price that aligns with current trends.

          4. Be Objective and Realistic

          Pricing your home emotionally can cloud your judgment. As a seller, it’s natural to want to get as much money as possible from your home, but pricing should be based on objective facts – not your personal feelings about the property. Assess the condition of your property. Are there repairs or upgrades that should be factored into the price? A property in pristine condition will fetch a higher price than one in need of major repairs, so consider these aspects when determining your listing price.

          5. Monitor Feedback and Be Willing to Adjust

          Once your property is listed, be open to feedback from prospective buyers and agents. If the feedback consistently suggests that the price is too high, be willing to reduce it. As noted by Lightstone Property, homes that are initially overpriced but later priced correctly often sell within a few weeks – as long as the price adjustment is made promptly.

            In Closing

            Pricing your property correctly is arguably the most critical decision you’ll make when selling. While overpricing might feel like a strategy to boost your return, it often results in longer time on the market, dwindling interest, and lower final offers. A smart pricing strategy – grounded in a solid Comparative Market Analysis, guided by honest expert advice, and aligned with real-time market conditions – sets you up for a quicker, smoother sale. Get the price right from the start, and you’re far more likely to close the deal on your terms.


            Related articles that might be of interest:

            Loved discovering this article? Why not sign up for our popular bi-weekly newsletter?
            Follow and like us on ❤ InstagramFacebookTwitterLinkedInYouTubePinterestTikTok for updates.

            This article was originally published on April 29, 2016, and was updated on May 21, 2025, to include the latest trends, new insights, and ensure accuracy and relevance.

            ImmoAfrica.net

            South Africa's fastest-growing, independent property portal, offering affordable solutions for real estate professionals. A hub of info covering topics for #homebuyers, #homesellers, #renters and #lifestyle enthusiasts!

            Related Articles

            Leave a Reply

            Your email address will not be published. Required fields are marked *

            Back to top button