WHY YOU SHOULD MARKET YOUR PROPERTY CLOSE TO IT’S VALUE

Here’s a question for you. Imagine your house is worth around £500,000.

Should you market at an asking price of £549,950 or a guide price of £500,000?

My answer: Market at a guide price of £500,000

Why? Well, a property is only worth what a buyer will pay for it so no-one ‘really’ knows the true value until you start marketing. But, a property marketed correctly WILL ALWAYS find it’s true value. On the whole, the value of a property is determined by what else buyers could buy for a similar price.

If you were to market your £500,000 house at £600,000, it is likely you wouldn’t get any viewings, certainly not enough to generate the best price possible, because your house would look extremely expensive compared to the £600,000 houses which are being marketed close to their value.

If you marketed your £500,000 property at offers in excess of £400,000, what do you think will happen? Yes, you would get LOTS of interest and buyers would almost certainly start bidding against each other pushing the price up. Similar to an auction. The bidding would likely end at the market value.

I am not saying this approach is right for all properties, I am just trying to illustrate the importance of your ‘marketing price’

There is another reason too and that’s to do with the change in how buyers search for a property now days.

10/20/30 years ago (before the internet started taking over the world), it was perfectly fine to market 7/10/12% over the value as you could always take an offer and your agent could always send the details to buyers looking at a lower price (with your agreement of course). The difference is that back then, the only places buyers would see your property was in the local paper or the agents window display and so buyers had no choice but to make contact with the estate agent to get more info such as more photos, room sizes, ask about the road etc. At this point, the estate agent could then say something like ‘The asking price is £549,950 however the vendors ‘may’ consider taking an offer, when would you like to view?’.

Now days, us agents rarely get the chance to have that conversation with buyers as they can see all the details online. Pictures, floor plan, rooms sizes, nearest train stations, nearest schools etc. They can even walk down the street using google street view. All this means that if potential buyers aren’t inspired by your house, or they think it looks too expensive for what it offers, they will just brush past it and move onto the next.

All the best,

p.s. Would you like more impartial advice? Head on over to my FREE eGuides page by clicking here.