When considering the value of a property prior to putting it on the market, many vendors understandably look at the asking price of other properties currently on the market locally, and draw pricing conclusions based on this research.
Whilst this is not an unreasonable way of determining value, there are some traps to look out for.
Firstly, an important observation is that if a property is on the market, it is by definition “unsold”. Unless it is relatively new to the market, an unsold property can often be one that is overpriced. If it had been priced correctly it would have sold, but in the event the market has rejected a property then it will probably only sell if the price is reduced.
The longer a property remains unsold the less impact it will have, so if you have a similar property and you price it at about the same level as the unsold property, the chances are that yours will remain unsold as well.
We know that many purchasers buy by comparison so your property has to compare favourably when seen alongside others on the market. If your property is similar to another on the market nearby, then yours only becomes readily saleable when it is priced favourably and offers better value for money.
Additionally, if you feel your property is slightly better than a neighbouring property for sale (as you are bound to, you chose the décor and it has your own possessions in it) then surely it makes sense to quote a similar price, rather than attempting to offset the extra features with a higher price. The other property may actually help to sell yours!
Ultimately, correct pricing is all about seeing the world through the eyes of the buyer and making responsible and effective pricing decisions, which always point to offering better value than that offered by competing properties available locally.
Market condition in 2015 resulted in numerous properties going under offer within a very short space of time. Buyer demand and available stock are key and these are currently still high and low respectively, yet if you scan the property portals in today’s market you might be surprised at how long some properties have been on the market and remain unsold. It is by no means a buyer’s market, far from it; however there has been a slight adjustment and a seller should discuss pricing strategy with their agent.
Price your property too high and you may not sell, price too low and you may undersell, price correctly and you will generate sufficient interest to attract buyers who, if interested, will make you an offer, which depending on price strategy and the competition for your property may result in you actually achieving more than you was expecting.
It’s always easy to fall into the trap of going with the highest valuation and you may need a certain figure in order to sell. If the agent can back up their claims for achieving their suggested price with genuine market research data, and whose website isn’t littered with unsold properties, then naturally the more you can achieve the better. It’s part of the agent’s job to achieve the best price although they must also be able to deliver on their promises.