RESIST THE HYPE OF A FAIRY TALE VALUATION!
Published 3 May 2022
In the current market, with limited supply and more buyers than there are houses available, it is always tempting as a seller to be seduced into setting your asking price somewhat higher than your house is actually worth. None of us wants to feel we have undersold our homes, but there are some definite downsides to being tempted to be too ambitious when it comes to setting a price.
Of course, there will always be agents who seek to flatter themselves into your favour by providing an inflated valuation, but bear in mind that this trick is everything to do with winning the instruction for their figures, and little to do with what the house will eventually sell for.
Tempting though it may be to go with the agent who tells you your house is worth more than it actually is, it will benefit you more to go with a valuation which is based on solid evidence and knowledge of the market. This isn’t just, of course, based on sales history; that is important, but with a dynamic, fluid market, sale prices are much more unpredictable than they may have been in the past.
So in a rising market, what is the issue with setting an over-ambitious asking price? There is always an outside chance that a buyer from out of area who hasn’t done their research may be initially prepared to pay it. But it is far more likely that a high asking price will deter genuine buyers, and lead to the property ‘sticking’ on the market, and eventually being reduced to a more realistic price.
With pretty much the entire market now visible on property portals, its easy for even an inexperienced buyer to quickly do their homework, and then such properties quickly acquire a reputation. Potential buyers may assume that there is something wrong with a property which has been reduced, especially if more than once (asking themselves why no-one wants to buy it), or else they might take the view that ‘if they have come down £10k already, they will probably accept an even lower offer’.
Ultimately properties find their level and sell for what they are worth in the market at that time. If a rising market means that a house if worth more than the asking price, buyers will invariably bid up to its true value, and sometimes beyond. Set the price too high, and those same buyers might not even consider viewing your house in the first place. A realistic asking price is about garnering interest, not setting the final selling price – the market will do that.
Typically, most sellers will ask for valuations from more than one agent. If one provides you with an evidence-based valuation, and the other sticks their finger in the air and quotes an inflated price simply to get your business, it’s sensible to consider which of those two agents is really going to achieve the best price for you, but also crucially to provide the best experience as your sale progresses.
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