Nathan Walker, Sales Director, discusses why it's important for sellers to choose the right asking price when first listing their property...
One common mistake among home sellers is setting an unrealistic asking price when first putting the property on the market. There are online tools available that can provide estimate valuations of your property, but these aren’t often entirely accurate. To set a realistic and accurate asking price you need excellent knowledge of the local area, an understanding of current property market conditions and you need to recognise exactly what it is your potential buyers are looking for.
Many things can affect the price of a property, so it’s not always as straight forward as you may think. For example, two homes could be situated in the same location, on the same street, with the same number of bedrooms, bathrooms and amount of outside space. However, certain distinguishing features could mean that the one property has a perceived value that’s much higher than the other.
To reach the right asking price all internal and external influences need to be considered. These include current movements in the market, buyer demand, the condition of the property and the location it’s based in. Leases and any restrictions within the terms of a lease can also have a big impact on the pricing. This is why an experienced estate agent with expert knowledge of the market in your area is a valuable asset when setting the right asking price for your home.
If potential buyers generally believe the property is overpriced, then it’s likely to remain on the market for much longer than it would otherwise. By overpricing your own property, it’s simply making other similar properties that are on the market look a far more attractive proposition. It’s also important to avoid undervaluing your property. Some sellers list their property below market value if they are looking for a very quick sale, but if this isn’t you then you’ll want to avoid listing with an asking price that’s too low as you’re likely to end up sacrificing profit unnecessarily.
There are three crucial aspects you really need to consider when it comes to deciding what the correct asking price should be.
Previous sales in the area
A look at the history of past sales in the neighbourhood can often give us some insight into the future. Looking at sold prices over the past 6-12 months in your post code area or of those nearby will give you an idea as to what sort of prices buyers are prepared to pay for homes that are similar to yours. You should also consider the amount of time the properties have spent on the market, along with the gap between the initial asking price and the price the property eventually sold for. Other factors to consider are proximity to schools and sought-after amenities, the overall condition, size, finishes and fixtures, and any other features that could set the property apart from others.
Recent trends in the market
Things such as changes to the market through government policy, access to finance and unemployment rates all have an impact on the property market on a national scale. However, there are also other specific influences that may impact a particular location. These may include things such as new businesses moving into the area or plans for improving the local amenities such as parks or shops. The removal of tolls on the Severn Bridge at the end of 2018 is a great example as this aided a huge price increase among many properties across South East Wales.
The type of property
Whether the property is freehold or leasehold might have an impact on its value. Houses are typically freehold while flats and apartments tend to be leasehold, though check if you’re not certain as this isn’t always the case. A property that’s leasehold will be worth more if it has a longer lease time remaining. For example, if a leasehold property has more than 80 years remaining on the lease it’ll be valued higher than if it had under 80 years remaining. If the property has 50 years or less remaining then it’s likely to be extremely difficult for buyers to obtain a mortgage for it, so this might mean relying on a cash buyer - which in turn vastly reduces the demand for the property.
Our expert sales team here at CPS Homes have first class knowledge of all suburbs across Cardiff, so don’t hesitate to contact us today to help you achieve that sale. Call us on 02920 668585, e-mail firstname.lastname@example.org or pop into one of our three Cardiff branches.