How can I check my property is priced correctly?
Hello everyone and welcome to Episode 3 of Ask the Estate Agent and I just wanted to start today with a huge thank you to all our listeners out there!
We have received some incredible feedback from our first two episodes, some fantastic reviews and also lots of questions for us to answer in future episodes which is fantastic, so again a massive thank you to all of you listening!
Remember this free resource is all about answering your questions and helping you on your property journey so if there is a particular question or issue that you are currently facing in property then please do get in touch so we can answer these for you in future episodes. All the links of how to contact us will be mentioned at the end of today’s show and featured in the show notes for you to access whenever you like soooo let’s get on with today’s show!
Today’s show is about one of the most important, talked about and often confusing subjects within property and thats property pricing!
We have received a huge array of questions around pricing your property for sale. Everything from – How do I accurately price my property for today’s market? How can I check my estate agents pricing? What’s the problem with overpricing my property? And even are there different strategies with pricing to achieve the highest price.
So in this episode I want to cover the essential points of how an Estate Agent accurately values your property and then cover the issues with overpricing, some strategies and then some key things to avoid when pricing your property for sale.
So let’s get stuck in!
Firstly I’ll highlight four key areas that your Estate Agent will assess when valuing your property then we’ll go over a few tops tips and points to remember.
- Price History
Very first thing to consider is the price history of the particular property. Land Registry is the main source for this information where we can see how many times the property has been sold, what the completion dates were and what price the property was actually sold for. NOT the marketing price the actual price paid!
- Market performance since those sales
Using the price history and last sale prices we can take into account how the market has performed since it was last sold, has the market in that area (region specific) risen or declined and by what percentage.
You can also see what similar neighbouring properties have sold for recently so again a very useful guide to what you could ask for your property.
- Current Market comparables
What is currently on the market and what are the asking prices, Sold STC – break down to price per sq foot and apply to your property square footage.
Finally looking at comparable properties in the area, similar size, style and what it offers.
Against those comparables you then assess does your property have any differentiating factors to them. Both negative and positive. Has one property been extended or perhaps has better views, double garage, is one gated etc.
All these factors will adjust the asking price.
- Market Demand
Once you have thoroughly assessed the comparable properties on the market you then need to assess the current market demand for your kind of property.
How long have similar properties been on the market. Are they sticking and therefore potentially over priced or do they have some aspect that is putting buyers off. This is what your agent will be researching and something you can assess as well by using the online portals.
Different properties are in often in demand at different times, so it’s important to look at how many properties of your type are on the market and how many are showing as recently sold.
I would also advice getting other agents opinions on the market and whether similar properties are selling quickly or not and at what price.
The more information you can gather the more accurate you will be with your pricing strategy.
After assessing all these four areas:
- Price History
- Market performance since those sales
- Current market comparables
- Market Demand
You will now have a very accurate idea of your property price in the current market.
One cavette which you must never forget! Even using all that data the price can never be 100% certain. Why? Cause the market is the market. Which is constantly changing day by day as it’s influenced by dozens of factors such as politics, monetary policy, bank lending, local incidents etc.
That’s why its absolutely critical to be constantly evaluating your properties performance once it’s on the market as demand and supply is changing every day and factors that influence house prices such as politics, interest rates, etc can dramatically change things very quickly.
The price is what somebody is prepared at any one time but nobody wants to overpay so be careful not to overprice.
If the market is rising then you can afford to aim slightly higher in price to the last comparable property sold. This is a way of testing that rising market and seeing if you can benefit from the increase.
If the market is stable or declining then stick to what the data and comparables is telling you. If you don’t have any interest within a few weeks and the market is declining then you do need to move quickly to re-check and potentially change the price in order to sell quickly.
Finally don’t forget that if your buyer is using a mortgage to purchase your property then the lender will ask a surveyor to carryout a very similar process to ascertain that they are lending at the correct level and value. By using the process I’ve discussed then any surveyor should come out with the same value by using the market data and prices and your agent can also show the comparables and data they used to value the property.
Over value and you will come unstuck as it may lead to buyers not being able to secure the mortgage they needed and cause the asking price to be re-negotiated downwards or even the sale to fall through.
So in summary
Always be realistic and stick to the facts and data being supplied by the market and you can’t go wrong.
Never take your eye off the ball and allow the property to stagnate on the market at an old price. All this data is publically available such as time on market, price reductions etc so not being pro-active with your property pricing will damage your chances of getting the sale you want.
So that concludes todays episode on property pricing. I hope you’ve found it useful and that it’s given you a few pointers to take away and either consider before marketing your property or even implement now if your property is already on the market.
So that leaves me to just say thank you very much for listening to this episode of the Podcast, don’t forget to contact us with any questions you want answering in future episodes.
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