Property asking prices
What is an asking price?
Each property is individual. For this reason individual properties do not have a fixed price, but the price of a property is dependent upon supply and demand. High demand pushes prices up. The asking price for a property is an approximate value allocated to the property, usually by an estate agent. This is the starting point for discussions with the market – the market will then determine whether the property is worth more or less than the asking price.
How is an asking price reached?
The asking price is a starting price suggested by the person marketing the property for sale (usually an Estate Agent or the property owner, if the property is being sold on a For Sale by Owner website). It is usually calculated based upon the recent sale prices of other similar properties in the area.
Estate Agents have a clear incentive to suggest a high asking price, as they will win the instruction through a combination of flattering the customer and making them believe that they can achieve a higher price. If an asking price is comparatively low, the property is likely to attract a lot of interest and sell more quickly.
Things to consider when setting an asking price?
- The recent sales prices of similar properties in the area
- Of course the aim is to achieve the highest price possible. However, beginning with a below market price could generate more interest and result in a higher sale price, than if the asking price was higher to begin with.
- According to research, setting a price just below a round number will attract more interest than setting the asking price at the round figure itself. For example, you may wish to market your property at £499,950 rather than £500,000.
- The cost of buying a property does not simply include the property itself, but also the fees of Chartered Surveyors, Conveyancing professionals and stamp duty fees. The percentage of stamp duty that must be paid increases with property prices. Because of this you may attract more buyers by setting your asking price below a stamp duty threshold (at £249,950 rather than £250,000). Stamp duty for disadvantaged areas is lower. Click here to search for your postcode and find out if you are eligible for a stamp duty reduction.