Putting your property on the market at the right price is crucial as it’s the early days of marketing that can generate the most activity. But what is the right price?
Selling your house – working out your home’s value
If you’re using an estate agent, you should be able to rely on their expertise to help you market your property at the right price. The problem is that some estate agents routinely overvalue properties just to get the business and end up advising their clients to reduce the price within a matter of weeks.
1. Be realistic. Sellers price their houses assuming that the buyer will want a reduction in the price but that may not be the best approach. In some parts of the UK, property is flying off the shelves, but in others, the buyers have the upper hand. If a property looks too expensive, they may not even give it a second glance.
2. Do your research. It’s fairly easy to find out what similar properties have sold for. Look online at property portals, such as Rightmove, Zoopla, On the Market and DIY house sale websites such as Tepilo. Compare the asking prices with the Land Registry (or Registers of Scotland) sale prices.
SAVVY TIP: These aren’t a direct comparison because the Land Registry websites record the sale prices from several months ago. But they will still give you an idea of what properties are actually going for.
3. Take advice. Talk to estate agents in your area. Personal recommendation is the best route but — if you don’t have any recommendations — find an estate agent who’s a member of the National Association of Estate Agents or the Royal Institution of Chartered Surveyors.
4. Put yourself in the shoes of a prospective buyer. Would you pay what you’re asking for your home? Would you expect to knock 20% off the asking price?
SAVVY TIP: Be aware that buyers are much better informed these days. They can quickly and easily compare prices of neighbouring properties and see exactly what they’re getting for their money as soon as the details are online.
Getting it right first time
In the current uncertain market it’s more important to make sure the price is right when you first put your property up for sale.
- The first days of marketing count. With many buyers searching online or getting new property details via their smartphones, you can reach the market very quickly. “If you’ve not had any buyers through your door after a fortnight, you should assume you’ve got the price wrong — unless you’re in an area where the market is very slow,” says Richard Hair of Hair and Sons estate agents.
- Don’t assume you can reduce the price if it doesn’t sell quickly. Jeremy Leaf an estate agent with Jeremy Leaf and Company says that after a property has been on the market for a certain time, buyers won’t be tempted by a cut in price. “If you reduce the price buyers just think there’s something wrong with it or that it’s failed the survey.”
Managing your buyers
You don’t have to sell your property at the price you market it at and some estate agents say that the price is a ‘guide price’ in the details. If you have several buyers offering the asking price within a short space of time that doesn’t necessarily mean you’ve priced it too low — it just means that you can have the pick of the buyers.
SAVVY TIP: In the current market where some buyers are struggling to get a mortgage, being able to take your pick of buyers could be the difference between the sale going ahead and falling through.
You can try and increase the sale price in two ways:
1. Using a guide price. This isn’t very common and has to be done carefully, but it can work well for both buyers and sellers. Instead of putting your house on sale at £220,000, for example, you market it at a guide price of £200,000. If you get more than one full price offer you ask buyers if they are willing to increase their bid to £205,000, then £210,000.
SAVVY TIP: This sounds like it would annoy buyers but estate agent Richard Hair says that buyers don’t mind it because they know what they’re being asked to pay and know who they’re up against. “It’s almost like a private auction, but without the auction pressure.”
2. Using sealed bids. This can work well for sellers but buyers don’t tend to like it as it’s impossible to judge how much they’ll need to pay to secure the property.
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