When considering the value of a property prior to putting it on the market, many vendors understandably look at the asking price of other properties currently on the market locally, and draw pricing conclusions based on this research.
Whilst this is not an unreasonable way of determining value, there are some traps for which to look out.
Firstly, an important observation is that if a property is on the market, it is by definition “unsold”. An unsold property is invariably one which is overpriced. If it had been priced correctly then it would have sold, but in the event the market has rejected it and it will probably only sell if the price is reduced. So if you have a similar property and you price it at about the same level as the unsold property, then the chances are that yours will remain unsold as well.
We know that purchasers buy by comparison. So your property has to compare favourably when seen alongside others on the market. If your property is similar to another on the market nearby, then yours only becomes readily saleable when it is priced favourably and offers better value for money.
Additionally, if you feel that your property is slightly better than a neighbouring property for sale (as you are bound to as you chose the décor and it has your own possessions in it) then surely it makes sense to quote a similar price, rather than attempting to offset the extra features with a higher price.
Ultimately, correct pricing is all about seeing the world through the eyes of the buyer and making responsible and effective pricing decisions which always point to offering better value than that offered by competing properties available locally.
Our next article will consider the merits of pricing in relation to properties that have already sold.