OVER ASKING PRICE
What you need to know about the asking price during a sale, and why not all pricing strategies are created equal.
We take it as given that when selling our homes and considering estate agents, that robust knowledge and understanding of the local market are part of the package when we sign a sales contract. Having invited two or three different agencies around to give a valuation, we will of course get a broad sense of what we can hope to achieve when offers hopefully start coming in.
A different way of thinking about a valuation is to look at it from a potential buyer’s perspective. Open Rightmove, set minimum and maximum price - sort by new and hit search. Depending on search criteria you’ve probably excluded around 80% of the properties on the market in the area. While this all makes sense in the search for your dream house, the perfect place might be just out of budget or hidden by a gatekeeping filter.
As Estate Agents our job is to do our best for clients in selling their house to the best buyer for the highest price - but how we market that house, and to who, plays the most important role. If the highest priced valuation won the contract from a vendor every time, we’d all be valuing properties at outrageous sums - which would be neatly followed by no viewings and few if any offers. No one would be any the wiser about how much anything is worth and I’m not sure the vendor would be impressed.
The aim is therefore to carefully balance the perception of value (versus comparable properties for sale or recently sold) with the client’s needs. All the while trying to not encourage the level of interest that makes your inbox burst into flames and severely reducing the Agents’ capacity to communicate adequately with everyone involved.
The other side of the coin of the matter involves going to market with an aggressively high price. Fewer viewings, fewer offers and potential for the dreaded price reduction leaving eyebrows raised and vendors asking uncomfortable questions. It’s less work for the Agent but are they doing their best for the client? The answer to that question perhaps lies in the vendor's expectations and needs. We guide as best we can but ultimately don’t make the final decision.
With approximately 30% of properties selling for over the asking price in the UK, it would be unfair to say it’s as simple as buyers casually paying above market value. Perhaps these sales are just a result of better marketing and understanding of the property market as a whole.