When an inflated asking price stops a sale

A few months ago, the owner of a one-bedroom apartment in Banovo Brdo contacted me. The apartment was attractive, well maintained, situated on a good floor and recently renovated.

He wanted to know how much he could realistically expect to receive for it.

I analysed the available listings, market data and the prices realistically achievable for comparable apartments in that part of the city. Based on that information, I gave him my valuation.

He did not like the figure.

He wanted to list the apartment for €15,000 more.

“I invested in the renovation”

The owner had two main arguments.

The first was that he had invested a significant amount in renovation and therefore expected a higher sale price.

The second was that a neighbour on the same floor was reportedly offering a similar apartment at the price he also wanted to achieve.

Both arguments may sound reasonable, but neither determines the property’s market value.

Money invested in renovation does not necessarily translate fully into a higher sale price. Buyers assess the quality of the work, functionality, style and whether the design suits their own preferences.

The neighbour’s asking price is not proof of market value either. It shows how much the neighbour wants, but not whether the apartment will sell or at what price the transaction will ultimately be completed.

The asking price represents an expectation. The sale price represents the market’s response.

I explained the risk of overpricing

I explained what commonly happens when a property enters the market at a price significantly above its realistic value.

Serious buyers do not necessarily see it as an opportunity to negotiate. They often simply disregard it.

The apartment then remains listed for weeks. When the price is eventually reduced, buyers no longer see it as a new opportunity. They see a property that has been on the market for a long time and begin to wonder:

• why it has not yet been sold;
• whether there is a problem with the apartment;
• whether the price will be reduced again;
• how much the owner is actually prepared to negotiate.

This can waste the most important period of the sale — the time immediately after the listing is published, when buyer interest is usually at its highest.

We still tried the owner’s preferred price

The owner understood my explanation but wanted to test the market at his price.

We published the listing.

Over the following two months, it generated only a few enquiries. Not one resulted in a viewing.

The apartment was well maintained, properly presented and located in a desirable area, but buyers did not see sufficient value at that price.

The market effectively confirmed the original valuation.

Correcting the price changed the result

After two months, the owner called me and said:

“Let us use the price you originally recommended.”

We adjusted the listing.

Buyer interest changed almost immediately. We began receiving enquiries from people for whom the location, layout and condition of the apartment made sense within that price range.

The apartment sold within three weeks — at the price we had estimated from the beginning.

The apartment itself had not changed. Neither had its floor, layout, location or the quality of its renovation.

Only the price changed — along with the way buyers perceived the value of the offer.

A valuation is not the number an owner wants to hear

A reliable valuation is not the highest figure that can be placed in a listing.

It is not necessarily the amount the owner invested, nor the price a neighbour is currently asking.

A valuation should indicate the price at which a property can realistically attract serious buyers and sell within a reasonable period.

That does not mean selling below its value. On the contrary, the objective is to preserve the initial wave of interest and position the property correctly from the first day.

A valuation is not the number an owner wants to hear. It is the number at which the property can actually sell.