Getting the asking price wrong when selling a property is probably one of the easiest but most crucial mistakes to make. Naturally, everyone wants to achieve the highest price possible (and rightly so). But did you know that it is often the lowest priced properties that sell for a higher price than the highest-priced properties?
You may be thinking, he’s talking a load of… but it’s true! Think about it. If a property appears really good value, everyone is going to want to view, and likely, offer on it. That competition will drive the price up to the absolute market value.
Think Auction. Think Ebay.
When selling anything, especially a property you want to price for the majority and hope the minority buyer attends the block viewing.
In contrast, if all the thorough research (recent comparable sales, the price per square foot comparables, competition assessments, and so on) suggests that your property is worth £500,000 and you decide to market at £525,000, what do you think will happen?
Firstly: You will have limited interest as your property will appear expensive compared to the competition (and it’s important to note here that 70% of the interest and the best price offers on a property will come in the first 3 weeks of marketing).
Secondly: You are justifying a buyer to offer on a competing, correctly priced property. In other words, you’re helping your competition sell.
Thirdly: It’s likely after 6 weeks your property will start to stagnate on the market. It’ll become the “oh, that house is still on the market, there must be something wrong with it”. No-one wants what no-one else wants and everyone wants what everyone else wants. It’s human nature. Unfortunately, there is only 1 solution to the third and that’s a price reduction.
Fourthly: You’re going to have to reduce the price, but there’s an issue…Do you think a price reduction to £500,000 will do it? Probably not! Your house has now stagnated on the property market and you’ve missed the prime market launch period to get competing offers and so the best price. You’re going to need to reduce your £500,000 house to £480,000/£490,000 in-order to re-invigorate the marketing and make it appear in searches where people wouldn’t have previously seen it.
So what started out as ‘let’s just try a bit higher and see what happens’ has actually cost you £10,000/£20,000 and 2 months of wasted time.