Why Overpricing Your Home Costs You Money

Every year in Canterbury, vendors leave significant money on the table by overpricing their properties. It is counterintuitive - surely pricing high gives you room to negotiate down? In practice, it does the opposite. Here is why overpricing costs you money and what happens to properties that sit too long on the market.

How Buyers Think

When a buyer opens realestate.co.nz or Trade Me Property, they search within a price band. A property priced at $850,000 in a suburb where comparable homes are selling for $780,000-$810,000 appears overpriced to every experienced buyer who views it alongside those comparables. Buyers do not negotiate down from $850,000 to $800,000 - they simply do not enquire in the first place. They buy the correctly priced competitor instead.

The Stale Listing Effect

A property that has been on the market for 60, 70, or 80+ days when the Canterbury average is 40-46 days triggers a red flag in buyers' minds. Why has it not sold? What is wrong with it? Even if the answer is simply that it was overpriced, buyers assume there must be something more fundamentally wrong with the property. They either avoid it entirely or approach it with strong scepticism and low offers.

The Price Reduction Cycle

The typical overpriced listing follows a predictable path. List at $850,000 with a $780,000 underlying value. Low enquiry and open home attendance. First price reduction to $820,000 after four weeks. Modest improvement in enquiry but property still feels stale. Second price reduction to $795,000. Eventual sale at $770,000 - below what the property would have achieved with correct pricing from day one. The price reductions attract bargain hunters rather than genuine buyers, and the extended time on market creates a perception of desperation. Harcourts Gold's March 2026 market update noted this exact pattern: first offers not taken resulting in lesser eventual sale levels.

The First Offer Is Often the Best

In the Canterbury market in 2026, buyers are active and decisive. A well-priced property in a good location will attract its best offers in the first two to three weeks of the campaign, when buyer interest is highest and your listing is fresh. The first serious offer you receive is often the best one you will get. Vendors who hold out for more, reject legitimate offers, and push for a higher number frequently discover that later offers are lower, not higher.

How to Avoid the Overpricing Trap

Get three independent appraisals. Ask each agent to show you the specific comparable sales evidence supporting their price range. Cross-reference those comparables at settled.govt.nz to verify accuracy. Be particularly sceptical of the highest appraisal if it cannot be supported by recent, specific, directly comparable sales. Price your property within the realistic market range - and trust your experienced local agent's assessment of what that range is.

For general information only. Always consult your agent and review comparable sales evidence before setting your listing price.