In a previous newsletter we considered some of the dangers associated with pricing your home in relation to other properties available for sale (i.e. those remaining unsold). This time we’ll consider pricing in relation to the properties which have actually sold.
When considering what asking price to quote, common sense dictates that the price of other homes, which have sold, could be a good indicator as to the price you should be quoting. However, your research may well prompt you to price your property at a level which could under- or over-estimate your optimum sale price.
Irrespective of national trends, the property market is very sensitive to imbalances in supply and demand. When there are many buyers all seeking a particular type of property, of which there is only one available, the competition factor will result in the seller being able to maximise the achievable price. In reverse, the achievable price could be lower if there are several such properties on the market at the same time. The sold prices you see on a website containing sold price date will not explain this.
Some buyers will pay whatever it takes to secure their dream home, resulting in a record price that may not be matched by future buyers for similar properties. Conversely a situation could arise where a desperate seller, who might otherwise suffer repossession, agrees to sell at a very low figure for a quick sale. Again, sold price data will not explain this.
Something else to consider are the prices for properties currently Sold STC (where a sale price has been agreed and the transaction is on-going). The price on the website is (for example) showing as £600,000 but how much did the buyer agree to pay? how much did they offer the seller? Once the sale has completed, and the Land Registry data updated, you can easily find this out, yet access to such data could be months away – the sale could be in its early stages and for all you know the actual price agreed could be £575,000; on the other hand it could be £625,000 – either way it’s a pretty big swing.
So should a “soon to be” seller carry out their own market research? Absolutely, why not have a look on-line to get an idea on property prices; it makes for a good starting point. The best estate agents keep their ear to the ground, keeping track on all stock currently in their market-place, often knowing more about these properties than a website listing can offer.