Why it’s essential to price a home correctly when selling
Wed 16 Nov 2022
Everyone will have a theory on the best way to price a home to sell and at Moginie James we’ve seen many different tactics being used for accurate house valuation, in our experience, some of these succeed while others fail.
What we do know is there is a cost if a home isn’t priced properly from the start. It could either sell too quickly for too little money or it could end up taking a long time to sell because it struggles to secure viewings.
We sold over 6,000 homes last year. One of the things we understand the most is there is a big difference between the ‘asking price’ for a home versus its ‘market value’.
Price a Home: Asking Price
A home’s asking price is just that, it’s typically a decision between an agent and the seller on the price to advertise the home. This should be based on the agent’s expert knowledge of similar homes which have sold recently and your view on what the home is worth – after all, it’s your home, so you should have the final say on the price your home should be marketed for. Once the ‘asking price’ is agreed, this is the price the home is initially advertised for on the agent’s website, portals, social media etc.
Price a Home: Market Value
However, although the asking price is what we will initially advertise the home for, once it goes on the market, the decision of how much your home is worth is very much down to buyers who are looking at the time your home is for sale. And, until we have a proceedable offer, the price of the home will be undetermined.
Why it’s essential to price a home correctly the first time
What’s essential though is to make sure we set the asking price at a level we know buyers can afford and indeed can prove to them the home is worth it. Today, prices are completely transparent as the price a home has been sold for in the past is published online, albeit some months after the transaction has been completed.
Buyers can check two things from a market value perspective. Firstly, they will be viewing similar homes in the local area, so they will have a good idea of the value of your home versus others. Secondly, they can check how much similar homes to yours have sold for in the past – and they can do this free of charge.
Part of agreeing on the right price for a home at the start of a sale is making sure the home appeals to the largest audience online in order to secure as many viewings as possible. One of the things we do is to understand which of the price brackets most buyers are searching for. If we can ensure your home is marketed within a popular search bracket, it can make the difference between a successful sale or one which takes a long time because there are fewer buyers searching. This doesn’t mean you have to offer your home for less than you think it’s worth, as a home can be marketed for ‘offers over’ which ensures buyers understand the minimum amount the home will be sold for.
But it’s worth remembering that the buyers we work with today are extremely savvy. They know whether a home is priced fairly – or too high – and the danger of pitching a home’s price for more than it’s worth is that the right buyer doesn’t get to see it because they aren’t searching in that price bracket or, they consider the home is ‘over-priced’, and this can be enough to put some buyers off even viewing your home.
Most sellers, understandably, want the best price for their home and the great news is that if a home is priced fairly from the start, this will help to generate more viewings. The more viewings a home gets, the more likely there will be at least one, but better still, two or more buyers competing for the home.
House prices are typically maximised when buyers have to compete - although it’s important to make sure the buyer is proceedable, so paying with cash, already have their own home under offer and, if needed, have secured a mortgage ‘agreement in principle’.
There are lots of things you can do to make sure a home’s price is maximised from ensuring the home has kerb appeal, staging it inside, decluttering, and de-personalising the home, but the most important starting point is to get the price right and that’s what we at Moginie James do well.
To find out what your home is worth and how quickly and successfully we could sell it for you, book a free accurate house valuation.