How to Set an Asking Price When Selling a House in the UK
What price should I ask for my house? How do you find out how much your home is worth and how do you decide the asking price for selling?
These are questions every homeowner will need to answer very early on during the house selling process. There are some top tips to consider for selling your home, and perhaps some of the most important pertain to the asking price you set. Whether you sell houses online, privately or with the help of a traditional estate agent, the initial asking price you market your home for is crucial. How do you sell a house quickly? Well, one of the most efficient ways is to set a relatively small asking price. But, as you will discover in this guide to selling a house in the UK, things are a little more complicated.
Let’s face it; for most people, selling your property is the single biggest financial endeavour in life. Doing your homework and assessing your position is essential. There are now several ways to sell property in the UK, including with the help of an online estate agent. But not all of the methods available will be right for you.
The final asking price you settle on will depend on a broad range of issues including recently sold house prices in the area, local property market nuances and your personal circumstances. While most homeowners only want to maximise the final sale price their home achieves, your priorities might relate to securing a deal as quickly as possible — in which case you might have to settle on a slightly lower price. Indeed, there are often many issues at play when setting an initial asking price for a property, including the home chain, the wider economy, cash offers and local demand.
So before you settle on a marketing price for your home, you should put some thought and research into the issue. You can either do this yourself, rely on the expert services of a local estate agent, or depend on a little of both.
Assess the issues that could be affecting the market value of your property
Residential estate agents know what to look for when they’re valuing property. There are many issues to consider, which is why most homeowners still leave the bulk of the work to the professionals. If you’re taking control of the valuation process, or you only want to be sure that your agent is conscientious, factor in the following issues when deciding on an initial asking price:
- Number of bedrooms
- When was your home built
- Size and dimensions of your garden
- Your home’s square footage
- Parking facilities
- Structural issues
- Cosmetic issues
- Attractive features, including conservatories, double glazing, etc.
There might also be obvious issues that affect local property values. Many of these problems will be completely out of your control, but they will still be relevant to a prospective buyer’s decision-making process. Among the issues to consider are:
- The proximity of good schools
- Street parking
- Local parks
- Local amenities
- The proximity of electricity pylons and mobile masts
- Local transport links
- The general reputation of the local neighbourhood
Take the right approach for you when setting an asking price for your house
Taking a systematic approach to the setting of a suitable asking price is essential in the current climate. The issues affecting the UK housing market are more complex than ever before, so you must, where possible, take your time to factors in all of the relevant issues. But before you do any of that, make your home as attractive as possible, and ready for viewings. Of course, this means attending to repairs and making your home presentable. But it also means tailoring your home to the likely priorities of your target audience.
Whether you sell your home using housing websites in the UK, on your own or with the help of a traditional agent, it’s important not to be pressurised into setting an asking price you’re not comfortable. The final decision lies with you, so make it about your circumstances and not those of an agent.
If your top priority is to sell quickly, your interests may be best served with a lower-than-average asking price. And to help you access local contacts and knowledge, enlisting the services of a traditional estate agent could be the best course of action. But if your priority is to extract as much cash as possible from your home sale, setting a higher asking price and using an online agent might be your preferred option. You might be left to, ostensibly, sell a house yourself, but you will be charged a fraction of the fee traditional agents often charge. Indeed, there are some flat fees of less than £400 currently available in the UK.
Research the local property market thoroughly
A lot of online estate agents in the UK will not tell you how to sell your home — they will only advertise it for you. You may need to take the reins, and this means performing your own research on the local market for homes. But this shouldn’t intimidate you in any way, as there are plenty of online resources available to you, and most of them are free. Rightmove and Zoopla are massive websites, filled with a vast range of data on sold house prices and asking prices. You can search for sales data by date and location, so you should be able to collate the information you need for your valuation relatively quickly.
How much have houses like yours sold for in the area over the last two to three months? If you can find a definitive answer to this question, you will know roughly what local buyers are prepared to pay you. A range of prices, rather than an average. It will then be up to you where in that range you position your house. Before you reach a decision, however, assess where the local market is at right now. Are homes spending less time on the market, or is supply outweighing demand in your neighbourhood? Are prices currently on an upward trend, or are they stagnating?
While ascertaining an appropriate asking price shouldn’t be too problematic, you will need to address your selling priorities before marketing your home.
Adopt a house selling approach that reflects your circumstances
There is no right and wrong way than thinking about how to sell a house. Whether you use a High Street agent, an online agency or sell privately, you should choose the approach that suits your current situation, and your plans for the future. But it doesn’t matter which method you choose; you will be the person who decides on the initial asking price. An agent will only use his or her expertise and know-how to make suggestions. And if the agent doesn’t have local knowledge or an understanding of your circumstances, this recommendation could be wholly inappropriate.
There are two main approaches to the setting of an asking price, and which you go for will depend on whether your priority relates to price or a timeframe.
Open with a low asking price, and engineer a bidding war
If you want to speed the selling process on by attracting a lot of interest in your home, then list your property for sale at a relatively low price. Nothing attracts the attention of house buyers like value for money, so you should be able to generate some interest within a few days of your listing going live. Your asking price is just a guide, and you’re under no obligation to sell your home for that amount.
Once you have multiple buyers interested in your home, you can play one off against the other, and spark a bidding war. This method of house selling is not very popular in the UK because of its riskiness, and it won’t be appropriate if your priority is to achieve the best possible price for your home. You can put yourself in a strong position, however, by rejecting the first few offers that come in.
Open with a high price and negotiate
If you live in an area where demand outstrips supply, and you have time to work on achieving the best price possible, your best option might be to list your property for the highest asking price you can get probably limiting the interest shown in your house, Doing this will test the waters. If your home is worth somewhere close to the asking price, you’ll receive an offer. If not, you can always reduce the price a little, then reassess.
One of the advantages of this approach is that you can create the impression that the buyer is in the driving seat. When you inevitably have to reduce your already inflated asking price, you can make it appear like you’re doing the purchaser a favour. But this method is also not without its risks. If your high asking price puts people off and leaves your house on the market for a long time, local buyers will start to question its quality.
Don’t let the initial price dictate the final selling price your home achieves
It’s important to remember that your asking price is only a guide for potential buyers. It is a starting point for negotiations, and the chances are the final selling price will be considerably different. While the asking price is crucial to the marketing process, it shouldn’t distract you from selling your home for what it’s worth in the current market.
The asking price you set won’t necessarily reflect the amount you eventually receive. If you were to list your home today for £400,000, it is very unlikely that you’d get the full asking price right away. The standard practice is to offer something between 5% and 10% lower. So if your estate agent tells you your home has the potential to achieve £400,000 on the open market, you should set an asking price of something between £420,000 and £440,000 — giving you a lot of wiggle room when the real negotiations start. This scenario is highly likely in the UK. According to Which?, 73% of buyers come in with an offer less than the asking price the first time around. And a whopping 66% succeed in securing their home for less than the initial guide price.
Unfortunately, nothing in the UK property market is easy or predictable. The Which? Survey also revealed that 5% of home buyers in the UK pay more than the initial asking price for their home. To achieve a similar outcome with your property sale, you will need the advice and guidance of someone with detailed local knowledge. With the right strategy, there’s a chance that your sale could exceed expectations too.
Do you need to sell a house quickly?
You might need to sell a house fast to ensure that the home you’re buying isn’t snapped up from under your nose. Or you might need to release equity in your home to pay off. Whatever your reasons are for requiring a fast sale, there are ways of giving the process a helping hand.
Start with a small asking price
Setting a low asking price will generate a lot of interest in your home quickly, as nothing arouses buyer interest like value for money. Also, you might be able to attract the attention of investors and developers, who can often pay in cash and don’t have to worry about a property chain.
Sell to a house buying specialist
There are house buying sites in the UK that specialise in making offers for homes away from the real estate market. These sites offer up to 100% of market value, and they remove the need for marketing, negotiating and conveyancing. If you require the cash from your house quickly, this could be the best option for you.
Set up a sealed bid process
You can avoid a long, drawn-out negotiation process by cutting straight to the chase with sealed bids. This process requires that you ask for the best and final offers of all interested parties by a specific deadline. The highest bid wins the process and has their offer accepted. If you need to sell by a certain date, dispensing with negotiations and bidding wars by selling fast could be an option.
You are under no obligation to accept the highest offer if your price expectations are not met. You can only restart the process or pursue other house selling avenues.
If you need to sell for the highest possible price.
If you just can’t afford to give buyers any discount, you’ll probably need to start the house selling process with a relatively high asking price. If your marketing price is significantly higher than your home’s market value, you’ll be able to accept lower offers without missing your target. But this approach can be laborious and time-consuming, and you’ll need to be prepared to lower your expectations in increments, depending on the demand for property in your neighbourhood.
Top tips to sell your house at the best price
If you decide to sell your house privately, you will need to know a few tricks of the trade when it comes to maximising the sale price you achieve.
Use High Street estate agents
You can keep your finger on the pulse of the local property market by regularly checking the windows and websites of traditional agents on the high street. The homes sold this way are managed by individuals with detailed knowledge of the local area, which could be invaluable in your quest to maximise your house’s sale price.
Ask three professionals to value your home
While you can get a rough idea of the market value of your property, the advice of local agents in this matter will be critical. There are often nuances in localised areas, and they won’t necessarily be evident in the raw data you find on the Internet. Ask three agents who have local knowledge to give you a valuation. Although these are only educated guesses at how much your home can fetch on the open market, they will help your decision-making process.
Work out the minimum you can afford to accept
Before you even market your home for sale, you need to work out the minimum offer you can reasonably afford to take — this will be the basis for your home selling strategy. But it’s also worth remembering that any discounts given can be recouped by making speculative offers on the home’s you’re looking to buy.
There is no scientific approach to the setting of an asking price. You need to research the market, make your home as attractive as possible, and seek the advice of professionals. Once you have a rough idea of how much your home is worth, you can then apply your priorities to the decision-making process – giving you an appropriate asking price that will make you the best chance possible of achieving your property selling goals.