Discover How Using The Right Pricing Strategy Can Increase Your Sale Price
Are you confused by your valuation figures? With so many different opinions, you might not know what to do for the best. This article will shed some light on those figures and give you the answers to your questions before you go ahead with putting your home up for sale.
If you have already had your home valued for sale, you might be left feeling slightly confused – each agent has given you a somewhat different range of prices to estimate how much your house could be worth. So, what is the value of your home? What price should you put it on the market for?
When an estate agent gives their opinion on the value of a property, it is just that – an opinion. There are no hard and fast rules, no exact methods to valuing a property. It boils down to how much that individual agent thinks they can get a buyer to pay for your property. The higher that figure, the happier you as the seller will be, and the higher their fee percentage will be, so it’s in both of your interests to aim for the highest price possible. But, the issue is, if you aim too high, you will over-egg it and might not have any viewings, resulting in no sale.
Because there is never an exact price for any property, agents will usually recommend a price range to sellers, so the value of your home will be somewhere between X and Y. Of course, using evidence to back up this figure range, based on other properties that have sold very recently and the demand in the market from buyers for properties like yours, the agent will estimate with as much accuracy as they possibly can. Still, it is actually your circumstances that often dictate the resulting marketing price of your property.
Why is this? Because the marketing price that you ultimately opt for when putting together your marketing strategy is determined by your timescale and urgency to move.
Each property will have three values that sit within a range determined by the timescale of the seller.
1️⃣ Guaranteed Sale Price
The figure the agents are 100% confident they can achieve without hassle. It is often on the lower end of the range of figures but will pretty much guarantee you a sale within a reasonably short time. You should choose this price if you're in a rush and need to sell quickly.
2️⃣ Market Value
The average of your valuation ranges; this price is most likely the true market value of your property. You will see a sale in a respectable time, but there's no hurry and no guarantee of the resulting offers you may receive.
3️⃣ Aspirational Price
This would be the top price you're quoted, the most money you could ever hope to sell your home for. There's no guarantee that you will achieve this price and no timescale in which you might receive it. This price could mean that there are no viewings at all because you are pushing the value as high as you can, and you may find that actually it was a bit much, and you have to correct the pricing strategy further down the line.
The problem is that many sellers are presented with these prices and immediately opt for the highest price. Faced with a lower price and a higher price, of course, you want to get the higher price. It’s human nature to want the most for your most valuable asset, but you need to be aware that you most likely won’t get quick sale timing for aspirational prices.
So, what can you do if you want to sell reasonably quickly and maximise your price so you have more equity to buy your next home? You need to have a plan!
- Firstly, don’t just choose the agent that gives you the highest price. As previously mentioned, a valuation is simply the agent’s opinion. Take the various figures from your valuations to find the average – this will be as close to the true market value as possible.
- Take your price and select the agent you want to work with. Choose an agent with a robust marketing strategy to launch your home to the market with impact to generate those viewings and enquiries from buyers.
- Finally, you and your chosen estate agent need to execute the marketing plan with one important caveat. If you’re striving for the aspirational price, set a future date to consider the marketing and the resulting interest and correct that price if required.
People often shy away from reducing their price if they don’t sell straight away, and you hear horror stories of sellers having their property on the market for months, sometimes even years, without viewings or offers. If the property hasn’t sold within the first 2 months, the interest will sadly dwindle. The only way to recover would be to reduce the price or wait for the market to increase so that your property is accurately priced again – this could obviously take years, and there is no way of knowing how long.
The property market is unpredictable, but the algorithms and the website platforms are not. There is clear evidence that the most activity for any property is in the first four weeks when the property is new and is promoted widely across the agents’ platforms and the property portal websites.
There is no reason you can’t push for that aspirational price, but commit to reviewing the interest levels and pricing regularly. If it works out, you’re quids in. But don’t leave your property languishing on the market for months on end. Be proactive and address the strategy if it doesn’t work out immediately. We all want to aim high, but you must also be realistic!
If you would like more information about how you can market your home for an aspirational price, get in touch with our team of property experts today.