Selling your home: how to set the right asking price

Selling your home: how to set the right asking price

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If you’re thinking of selling your house this winter, you’ll need to think carefully about what price to list it for.

As we all grapple with high mortgage rates and a rising cost of living, more homes are remaining on the market for longer.

In a buyer’s market, sellers asking for too much risk being significantly knocked down on price, or their property not shifting at all.

But what factors go into setting an asking price, and is it really important or just part of the dance between seller and buyer? 

Read on to find out what the experts think, and for advice on the factors that impact how much you’ll get for your home.

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Sellers slash prices to lure buyers

New data from the property portals Zoopla and Rightmove show sellers are increasingly having to cut their asking prices in order to find a buyer.

Zoopla says the average discount buyers achieved in November was 5.5%, compared to 3.4% in the first half of the year. In monetary terms, this equates to an average reduction of £18,000. 

Rightmove found that price reductions are becoming more commonplace. It says 39% of homes had their prices slashed in 2023, compared to 29% in 2022. 

Properties took an average of 66 days to find a buyer this November, far longer than the 45 days recorded a year ago.

How are asking prices set?

It’s often suggested that sellers should get three quotes from local estate agents for their services. 

The agent will visit the property and provide an estimate of what they think it might sell for, and thus what their fee (usually charged as a percentage) might be. 

Don’t be too taken in by these estimates. For example, in some instances, an agent may be plumping up the price in an attempt to get you to instruct them ahead of the competition.

Additionally, experts routinely encourage homebuyers to see an asking price as just that – a guide to what the seller wants, rather than what the home is worth.

Some estate agents even state this in their advice to buyers. In a blog on its website, Foxtons says: ‘you might start with a lower offer to give yourself room in negotiations…buyers sometimes try 5-10% below the asking price as a first offer.’

The importance of realistic pricing

In a slow market, experts are encouraging sellers to be realistic about what their property is worth, and not be swayed by the agent offering the highest estimate.

Rightmove says sellers coming to the market in 2024 ‘will need to compete with cut-price neighbours and work with their agent to start marketing at a competitive price, rather than starting too high and needing to reduce later’. 

Robin Chatwin of the national estate agent Savills told Which?: ‘Adopting the correct price helps generate enthusiasm in buyers that a more subdued market does not provide. Pricing realistically from the start can achieve excellent premiums.’

The agent you choose should be open about why they’re recommending a specific price for your property, and have proven local knowledge.

Andrew Groocock of Knight Frank says: ‘Have they shown you comparable properties, have they sold a similar home to yours, and what price did they achieve? 

‘Agents should provide complete transparency on price, based on facts, so that you can make a balanced decision on which agent to instruct.’

Part of the marketing

We also spoke to the buying agent Henry Pryor, who buys £100m worth of homes for clients each year.

He describes asking prices as ‘just part of the marketing’.

He told Which?: ‘If you want to attract my attention as a buyer, set your asking price where I would expect it to be. This tells me you appreciate that the market has changed and that you are serious about selling. 

‘I may well end up paying over the guide, but then the asking price has done its job. It got me interested, got me to go and see the property and got competition in the shape of other buyers who pushed the price up.’

‘Offers in excess’

Some sellers list their homes as ‘offers over’ or ‘offers in excess of’ a specific figure – but Henry Pryor says this is just posturing.

‘”Offers in excess” is used by agents who disagree with their client’s expectations but can’t bring themselves to tell them. 

‘It’s a way of acknowledging the seller’s expectations but trying to keep the guide as competitive as possible’, he says.

Tips on setting the right asking price

  1. Check out local homes on the market: look in the window of your local estate agents and on portals such as Rightmove and Zoopla to see how much local properties are listed for. Think about any unique selling points to your home – has it recently had an extension, or is it located in the catchment area of a good school? Likewise, if your home needs a lot of renovation, factor this into your thoughts.
  2. Keep an eye out for price reductions: listings on Rightmove and Zoopla state the date on which the property came on to the market, and whether it has since been reduced. Zoopla even tells you how much the property has been reduced by. This information can give you an indication as to how quickly properties are selling and which types of home are being reduced.
  3. See how much properties have sold for: for a longer-term look at local property prices, use the Land Registry’s price paid tool. This allows you to enter a postcode and see which properties have been sold and how much for. One word of warning – it can take up to six months for a sold property to appear on the site.
  4. Get expert advice: as we mentioned earlier, it’s a good idea to get several estimates from estate agents as to how much your house is worth. Don’t just go with the first agent you speak to because you like their estimate, price or fee structure. 

How to make your home more attractive to buyers

Homebuyers are always told to view properties as a blank canvas, but there’s no doubt that the presentation of the home can have an impact on the likelihood of getting an offer.

Robin Chatwin of Savills offers the following advice on preparing your home for viewings:

  • Kerb appeal is crucial: There are simple steps you can take to present the property in its best light, and perhaps the key one is creating a great first impression. Get the windows professionally cleaned, consider a lick of paint on the front door so buyers aren’t put off before they walk in.
  • Keep it tidy, but not impersonal: Decluttering can help create a feeling of space, but don’t remove character altogether. Thoughtful splashes of colour and a few well-chosen soft furnishings can make a property feel more stylish and individual. 
  • Do basic DIY: Have a quick maintenance check,  replace broken light bulbs and tighten loose door handles. Even simple DIY jobs can put off potential buyers as they may indicate the house hasn’t been well maintained. 
  • Banish smells: Strong smells can be off-putting to buyers. You might love your dog but others might not, so air your home ahead of viewings and consider putting the coffee on or lighting a scented candle.
  • Tidy up the garden: Don’t forget gardens and outdoor areas, which are so important to buyers even in the winter months. Trim hedges, sweep up fallen leaves and provide a pop of colour by planting flowers in pots.

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