3 Pricing Strategies to Consider for Your Home
There are a number of different pricing methods you can choose from when selling your property and I have outlined three of the main strategies below to give you an idea of the options available.
Using an Asking Price is by far the most commonly used method and has the advantage of being something that most buyers will be familiar and comfortable with. You put the property on the market at an asking price in the expectation that buyers will offer close to if not match this figure. It’s important not to set the price too high as this will deter many buyers from viewing and also mean those that do view are potentially comparing it unfavourably to other higher priced properties. For example let’s say your property is worth £300,000, if you put it on the market at an asking price of £350,000 you will receive significantly less interest and those people that do view it will be comparing it with other properties priced at £350,000 which will probably be either bigger, nicer or better located. The asking price should be set as close as possible to the figure you are actually hoping to achieve.
Offers In Excess Of
Offers In Excess Of often abbreviated as OIEO essentially means that the owner is looking for a figure upwards of the stated amount. The key to making this strategy work is to have the offers over figure at a lower amount in order to attract interest and get buyers through the door. Using the same example as above putting the property on the market at offers in excess of £275,000 will really make the property stand out and mean that there is a lot more interest. Almost without exception the key to achieving the highest price is creating competition between buyers and that is what using an Offers In Excess Of strategy is designed to do.
Guide Prices are where a property is advertised as being in a particular price bracket, so using the example of our £300,000 home this may be advertised at a guide of £275,000 to £325,000. This strategy is not as commonly used as the above two options and can be unpopular with buyers who may think that surely everyone would just offer at the lowest point. The thinking behind this method is to encourage a wider pool of potential buyers to view the property and regardless of where an opening offer might be it is then the estate agents job to negotiate this up to an acceptable figure. An example of where this approach would work well would be for an unusual property where it is harder to put a definite value on it so using a price guide would allow you to test the market at a wider price point to establish the likely interest. The alternative might have been to put it on the market at an asking price of £325,000 to avoid under-selling it and then potentially having to reduce the price over a period of time until it is at a point where it starts to receive interest. Human nature is that people want things that other people also want so a property that has been on the market for some time and had a number of price reductions won’t appear as desirable as one that has just come onto the market.
Of course the above is just a brief outline and the strategy that is right for you will depend on the type of property, your circumstances and the current market conditions. Your estate agent will be able to offer you advice on this and if your property is in Derby then we would love to have a chat with you about what would work best.
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