You’d be surprised how many people equate ‘value’ with an asking price. It’s not hard to see why – agents call their pre-marketing pitches “valuations” and sellers often mistake of choosing an agent to sell their property based on the asking price they recommend. The asking price is all part of the marketing, it’s there to lure people to come and see the property. A good asking price should be viewed by a buyers “more than I’d want to pay but I guess about what I would expect”.
Things that don’t count when working out what you should ask for your home include;
🔺 What you paid for it
🔺What you need to buy the next one
🔺What your neighbour is asking for his
🔺What your friends say
🔺 What estate agents say
🔺 The cost to rebuild
🔺What you’ve spent on it
I regard the asking price as a guide to the greed of the owner or the enthusiasm of the agent to get the business. It is not;
🔺 an indication of value.
🔺 a statement of what the seller will accept.
🔺 what a mortgage valuer will sign it off at.
However, some buyers judge the success of their negotiations on the how much less they pay than the asking price. Not surprisingly some sellers and quite a lot of agents have noticed this and so pitch the guide higher than they would otherwise in the expectation that they will get chipped. It’s led to some properties being advertised for MORE than the price they asked when it didn’t sell last year. Myra Butterworth wrote about it last week in the Mail.
I’ve seen several examples of homes that didn’t sell in 2019 that have come back on post-Covid asking more. I know of one home in South London that came back at the same price that it didn’t sell for last October and is now under offer – the buyer thinks that they got a good deal because they agreed less than they were asking and seems unaware that they are paying more than they would have paid for it in March.
So, remember, if you are selling the asking price is just there to attract a buyer to come and see your property. It needs to appear sensible – not too high, not too low and once they come to see it the property can then sell itself.
If you are buying remember that the asking price is just bait on the hook. It’s there to get you attention. You decide what a property is worth, the seller has the luxury of deciding if it’s enough.