How Do You to Price Your Property To Sell ?
8 Jan 2015
It’s the start of the new year and many people will be thinking about putting their property onto the market to sell.
If you are serious about to selling, what is the very best pricing strategy ? Should you price it low in order to get more interest ? Or should you start at a high figure in a the hope that someone will fall in love with it and pay a top heavy price ?
Over the past 5 years there has been a massive shift in the way people search for a property to buy. The shift has been from footwork, to finger work. In the past people went out and walked around each agency picking up stacks of brochures taking them home to sift through. They then made shortlists, viewed them all, made another shortlist and eventually purchased their new place.
Nowadays the majority of people go onto one of the major websites such as Rightmove. They then put in what they are searching for, location, budget etc and then sift through the results pages, shortlisting from the thousands of brochures at their finger tips within moments. So how does this affect pricing ?
When someone is searching online rather than visiting an agency in person they are much more likely to be realistic about their budget. Online if they have a figure in mind of £140,000 maximum, they will tap £140,000 into their keyboard and the website will not send them any properties that are a penny over. They will then have thousands to search through so they generally won’t increase their budget.
When visiting an agency in person It is human nature to want to be able to afford more, it is for this reason that many agents will automatically add on 10% to what someone is saying their maximum budget is. The agent will then show them properties at this level. This strategy ensures that the agent is showing the person the best properties that they have seen, probably better than they have looked at online (because they are more expensive than the ones they have looked at online ). This is one reason for employing a good high street agent rather than, what I call a ‘listing service agent’; ( an agency that puts properties onto Rightmove and Zoopla and sits back waiting for calls ).
So what does this all mean for pricing ? It means that as we move from ‘foot work’ to ‘finger work’ pricing is becoming more and more important. The agent on the high street is able to blur the prices properties are marketed at, knowing which vendors are more motivated and which may take offers. The property websites online will never be able to do this.
So one argument could be that in areas that traditional high street agents dominate, and people are less likely to search by the internet you should go for a higher price. This is because the agents will push the property onto people who they think can stretch their initial budget upwards ? But these are generally the same areas where local knowledge is at its highest and people know exactly what houses have previously sold for. So you could argue that pricing has got to be at its most exact in these areas otherwise local people will lose trust. I know of certain agents within areas that have a reputation of ‘over-pricing’ to get instructions, and this is not a good thing for the vendors as people looking with that agency will always offer low.
With so much information available online people are able to see exactly what previous purchasers paid for a property and will generally be very wary of paying much more unless the market has risen by a considerable amount more, ( London being an exception ).
So what can make a buyer pay the most for a property ? Where do people generally spend a little more than what they first intended too ? You could argue that auctions are the arena that people will generally overspend in, competition between people will always spark someone wanting to pay more to beat a rival bidder.
From this argument you would want to price as low as possible, to get more people interested, to make it land in the maximum amount of search results online. This will hopefully then lead to multiple offers, and a competition between buyers pushing the price up. We have had considerable success using this strategy on the right properties, selling them in a quick timescale, over the asking price.
In conclusion, when pricing properties you have got to get it exactly right, and this is becoming increasingly important as more and more people search online. If you price it low then you may get lots of interest, competition and eventually a good price. If you over price it, then it may not show up in search results for the right people who are looking at that level.
So if you are looking for a sale in the near future then it is always better to price your property slightly lower than slightly higher, otherwise it may not even get seen, and remember that whatever offer you get for your property you are never obliged to accept it, even if it is the asking price.
If you are looking for a free market appraisal please call myself or one of the team on
0161 832 9922.
Robert Kenyon Sales and Lettings Manager Suttons City Living