The importance of correct pricing
Everyone wants to achieve the maximum possible price for their property but in order to achieve the maximum price it is so important to get your pricing strategy correct, If you list your property at too high a price you can end up chasing the market with asking price reductions and end up selling at a lower price.
Someone once said that you never get a second chance to make a first impression and never was this statement truer than when marketing a property.
The importance of quality media
The graph above shows the typical activity graph when a property is listed on Rightmove. It shows how in the first few days of listing there is a huge spike in interest shown in the property as potential buyers are notified of a new listing. When people first look at the listing the key things to ask are: Is the agent presenting the property in the best possible way using professionally taken photos, well drawn, clear, colour floor plans and a professional standard video? Does the description of the property and the area within which it is located sound interesting and inspiring or does it sound bland as if it is a template that the agent uses on all their listings? Is the description well written, with correct spelling and no typographical errors? It is truly shocking how some estate agents present their clients properties for sale and letting, with extremely poor photos taken on a mobile phone and no floor plan or video.
The asking price is the key
All of the things mentioned above are very important to capture and fuel interest however the number one thing that will convert passing interest into real interest that results in an enquiry and viewing request is the asking price. The asking price has to motivate and excite the prospective buyer to take the next step otherwise they move on to something else. If you don't capitalise on the momentum created when a property is first listed you can end up with a property which is going stale and has to be reduced in price to stimulate further interest. The bakery analogy is a very good one. When you walk into a bakers shop your attention is drawn to the freshly baked loaves which have just come out of the oven and are still warm and smell good, not the stale loaves that have sat on the shelf for days. The stale loaves will have to be reduced to entice someone to buy them.
Pricing strategies
The first option is a traditional asking price. If it is set too high potential buyers/tenants will think that the seller/landlord isn't serious about selling/letting and will probably not make an enquiry.
An alternative to a traditional asking price is to invite offers over a base price. This has proved to be a very successful strategy to hook more buyers/tenants interest. A keen headline price can bring more people to the table making offers which can then leverage the final sale/letting price to be much higher than the original advertised base price. This was the strategy used in the example shown in the graph above. It brought a flurry of enquiries as soon as the property was listed resulting in nine viewings and five offers being made. This gave our client a choice of buyers to sell to and resulted in him achieving a good price within a week.
Pricing strategy used by auctioneers
Auctioneers use 'guide' prices which are often a lot less than the expected sale price. Why do they do this? Because the more people bidding on a property creates momentum and pushes the price higher. As an example, if an auctioneer expects a property to sell for £1,000,000 and they advertise it at £1,000,000 but only one person comes to view it and they are the only person bidding on the day of the auction the property most certainly won't sell for £1,000,000. On the other hand if that same property was advertised at a guide price of £850,000 and twenty people view the property and ten of those people are bidding for it on the auction day then the momentum created by competing bids will mean that the property will probably achieve its target price of £1,000,000 but may even surpass it.
If you are thinking of selling contact us today.