One of the most common questions buyers ask — and one of the most important to answer correctly before making an offer. Paying $30,000-$80,000 too much on a property is surprisingly common. Here are the five signals an experienced property advisor looks for to identify an overpriced listing.
Signal 1: Days on Market
The most reliable indicator of an overpriced property is how long it has been listed. In a normal market, a well-priced property in Melbourne’s inner suburbs typically receives serious inquiry within 2-3 weeks and sells within 30-45 days. If a property has been listed for more than 60 days without selling, there is almost always a price problem.
| Days on Market | What It Usually Signals |
|---|---|
| 0-30 days | Normal — assess on comparable sales, not time on market |
| 30-60 days | Moderate concern — check for price changes in the listing history |
| 60-90 days | Strong signal of overpricing — vendor motivation is usually increasing |
| 90+ days | Almost always overpriced — maximum negotiation leverage for buyers |
Signal 2: Comparable Sales Don’t Support the Asking Price
The most rigorous way to identify overpricing is to run a comparable sales analysis. Pull the last 6-12 months of sales within 500 metres for similar properties (same bedroom count, similar land size, comparable condition). If the asking price is more than 5-8% above the median of true comparables, the property is likely overpriced.
Signal 3: Price Reductions in Listing History
If a property has already had its asking price reduced once or more, the vendor has already acknowledged the original price was too high. This is a strong negotiation signal — it tells you the vendor is motivated and the price has room to move further.
Signal 4: The Price Guide Is Significantly Higher Than Comparable Auctions
In Melbourne, auction price guides are legally required to be within 10% of the vendor’s reserve. If comparable properties are selling at auction in the $900k-$1M range and a private sale is asking $1.2M for a similar property, the private sale is almost certainly overpriced.
Signal 5: Low Inspection Numbers
Agents track inspection numbers carefully. If you ask the agent how many groups have inspected and the number is unusually low for a property of its type and location, the market is telling you something. Low inspection numbers relative to days on market is a clear signal that buyers are not seeing value at the current price.
What to Do When a Property Is Overpriced
- Do not offer at the asking price — you are the only interested buyer and have leverage
- Make an offer backed by comparable sales data to justify your number
- Give the vendor time to consider — do not rush a negotiation on an overpriced property
- Be prepared to walk away — the leverage only exists if your walk-away is credible
Frequently Asked Questions
Should I lowball an overpriced property?
A very low offer without justification can offend vendors and shut down negotiation. A better approach is to make a lower offer backed by comparable sales evidence — this is harder to dismiss and creates a professional negotiation dynamic.
Can an agent legally tell me how many offers are on the table?
An agent can tell you there are other offers (and is generally required to inform you of that fact), but is not required to disclose the number or amount of other offers. In a low-inquiry situation, the absence of competing offers is often evident from the days on market alone.
How Collings Property Advisory Can Help
A Collings Property Advisor will run a full comparable sales analysis on any property you are considering, tell you exactly what it is worth in the current market, and manage the negotiation on your behalf — all for a fixed $4,500 + GST.
Enquire now at collings.com.au/portal
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