"The Right Price"

Cristy

We are planning to sell our 3-bed terrace early next year, and I have been doing some thinking with regards to what the asking price should be. I have done my homework and I know that a realistic sale price for the property would be in the region of £180k. Another house in the same terrace row, in very similar internal condition to ours (done up nicely, judging by the photos on the EA's website), sold for around that amount BUT it had been on the market for around £195k, which I believe to be an extortionate amount for an ex council terrace in our area! Now the one next door to it has come on the market, no idea of internal condition, for £186.5k - same EA. I wonder if they decided their price based on the sale price of the one next door.

The EA who valued our house (not the same that dealt with the two properties above) believes in pricing properties realistically - roughly at the price he would wish them to sell for. I liked this EA a lot as we had similar views on these matters (I hate it when EAs overvalue houses!), but I am wondering whether pricing at, say, £182k to achieve a sale price of £180k would devalue the house in the eyes of potential buyers. I know that I would be suspicious if I saw two similar houses in the same street, one selling for 5-10k more than the other. I would think that there is something wrong with the cheaper one.

What would you do? What would you price the house at? How do you achieve the balance between pricing honestly and being competitive?

Thanks!

trace-j

It depends on what you get for your money from your competitors and how desperate you are to sell and move on. It's always worth getting hold of the particulars for your competitors properties to see what you're up against.

If you're property is viewed, chances are your competitors houses will be too. I certainly wouldn't think there is something wrong with a similar property at a cheaper price, it may present an investment property for the potential buyer to make some money. Any buyer won't ignore the potential to make some money, if there are plenty of houses on the market you need to be realistic if you want yours to attract attention. There are plenty of people desperate to take the first step onto the property ladder but can't afford it.

Your EA has given some good advice, but I can't help wonder if it's so that he can shift it and isn't eventually left with a property on his books that he can't sell.

Ian_W

Personally, Christy, I don't think within 5, maybe even 10%, anyone EA's included, can be *SURE* what a house will sell for.

The one similar to yours went for £186.5k, are you thinking yours will only fetch £180k because the market is so much slower, or some other reason?

I think you also have to factor in, these days, that people want to haggle and get something knocked off, otherwise you're seen as awkward and stubborn. You can read loads of these threads saying "the ave selling price is 94% of the asking price, what should I offer on..." so buyers expect to be able to beat you down a bit.

I also wouldn't be put off viewing a cheaper property in the same area, but I'm not sure how you make the distinction between pricing honestly [what you think it's worth?] and being competetive [what the competion think their's is worth?] cos the really important one is what buyers think it's worth!

My instinct would be to price similar to your neighbours [as trace-j says get their particulars] unless they've got some advantage you haven't. I don't think 186.5 is going to put off those who can only afford 180 - that's where I think over-pricing is very foolish, when it's so much over-priced it puts off viewers who would pay what you actually want.

So my view is if you're reasonably close [and 6.5k is only a tad over 3% above] to what you think is reasonable it gives you room to negotiate.

Mr_Proctalgia

Its difficult - I'm selling and buying (end of a long divorce) I intend to buy in my home town (which I still live in) I really thought I knew the areas around town, but am amazed to see similar properties with a 110% difference on the same estate, so you naturally start asking questions and looking on sites like Nethouseprices.com to see what is going off. All I can conclude is that a house has to (eventually) be worth what someone is prepared to pay for it. Because I'm old and single and relatively wealthy I do not need shops, schools or bus routes but that deflates the asking price for many sellers, to me it is a bonus! However I have to think that eventually I may need to move so I must consider the eventual selling of the property. In your case I would suggest looking at what similar properties have actually achieved in the past and doing a little maths to see where you should be now - Then stick a finger up into the wind and see how it goes.

BTW I have chosen an agent who refuses to overprice and negotiate a discount, he tells the underpricers to "go away" and find a house they can afford LOL.

Happy_saver_4

The lower the asking price the more interest and viewings from buyers !!!!

So once having got the punters to look, hopefully they'll see the value and you can sell at very close to your asking price also hopefully creating a quicker sale.

meanmachine_2

It depends on the area, but if you're expecting to get 180K from an asking price of 182.5, I think you'll be fortunate.

A property on for that wouldn't get an offer from me above £175K, but that's because I'm mean.

It depends on the buyer.

Put it on for what seems fair and then adjust accordingly.

I have to say £180K for a terrace seems incredible. What did you pay for it?

Happy_saver_4

meanmachine wrote:

It depends on the area, but if you're expecting to get 180K from an asking price of 182.5, I think you'll be fortunate.

A property on for that wouldn't get an offer from me above £175K, but that's because I'm mean.

It depends on the buyer.

Put it on for what seems fair and then adjust accordingly.

I have to say £180K for a terrace seems incredible. What did you pay for it?

Pleased to say most buyers will actually pay what the property is actually worth to them. They will initially offer below what they are prepared to pay. That is called negotiation.

If a buyer selects some spurious price plucked from the sky and based purely on an arbitary reduction of asking price he is not that an interested buyer. I know, having sold thousands of properties.

All I can say is "everyone to their own" :rotfl:

Cristy

Thanks everyone, you all made very interesting and valid points, lots of food for thought for us first time sellers

I think that we'll review the situation when we're nearer to actually selling (next year) by which time thinkgs might have changed, hopefully stabilised. As the EA said, we can 'test the waters' (without going over the top) and see how potential buyers react.

Meanmachine, just to answer your questions: we bought the house 3 years ago for £149k, spent about £11k on it. Yes, it is madness, all this money for a terrace, but such are property prices here in east Reading! And yes, thankfully they have been falling a bit.

I have no problem with negotiating a lower price with buyers, just as long as I can get about the same amount knocked off the asking price of the house we will be buying, LOL!

And just to clarify matters, £180k is the actual selling price of terraces around here at the moment, not the asking price. Your comments suggest to me that perhaps £182.5k is a touch low as an asking price, if we are aiming to get in the region of £180k. I just think that starting off from £195k to come down to £180k (as in the case of the house I refer to in my OP) is, well, silly. I would much rather price realistically and get people through that door!

meanmachine_2

Well if properties are still selling and selling for, as you say, £180K, then I do think that those buyers that are left are looking for what they think to be a "bargain".

So yes, maybe you're right. Maybe you do put it on for £190K and then sell for 180K.

It's worth a shot.

But I do think the days of one house coming on the market at X amount more than another that sold six months ago are long gone.

But really you are the best judge.

Happy_saver_4

Please just remember you can't sell your property until you've got potential purchasers coming thru the door.

If you initally ask far too much and other similar/comparable properties are available at a lower price, they won't even look at yours.

Subsequently you have to reduce the asking price etc etc and the property finishes up having the stigma of "been on the market a long time". Unfortunately, then you can finish up selling for less than if you'd initially marketed the property efficiently ; at the correct asking price . Below is a few comments as a general guide concerning price and the events after marketing;-

• Priced too high - buyers don't view
• Priced a bit too high - buyers look but make no offer. Something is putting them off ; needs sorting. A price reduction will sometimes sort this but it could for instance be more economical to redecorate etc. House doctor !
• Priced correctly - people look and try offers etc.
• Priced too low - sold to first buyer within hours of being put on market. Or the EA is doing his job exceptionally well or selling to his mate/nominee; perhaps

meanmachine_2

It's tricky because, as a potential buyer, I do know that there aren't many of us about - and so am more bullish than I might have been a year ago.

And happysaver does have a point, I only look at properties up to a certain price threshhold, at least in the first instance.

But surely it's the job of the Estate Agent to tell any potential buyer that a seller is flexible on the price, and to get people through the door. Isn't that their job?!

All I can tell you is that I'm not prepared to pay anywhere close to the asking price. Why should I?

But of course, others on here might have a different pov.