Getting The Price Right The First Time Matters
Introduction
There’s no doubt that many homeowners/sellers would want to sell their home for as much as possible. For some, it may be tempting to overprice their home to test the market. Here I discuss why it’s so crucial to get the price right the first time.
Pricing correctly from the outset vs. ’testing the waters’
Many underestimate the importance of getting the price of their property right the first time it comes onto the market. Many believe that they can simply price their home above the market value, i.e. overprice their home, to begin with to ‘test the waters’ (i.e. test the market) for a period of time, because they can always reduce the price later down the line without consequence. Respectfully, they are wrong.
Getting the price right the first time matters!
In fact, according to Rightmove, properties that are priced correctly from the outset are significantly more likely to sell than those that are overpriced - this includes properties that were overpriced to begin with, then subsequently reduced later down the line.
Sales performances of reduced properties vs. non-reduced properties, according to Rightmove
Interestingly, Rightmove has compiled the following statistics below, showing the sales performances of properties that have been reduced (i.e. properties that were initially overpriced) compared to properties that have not been reduced (i.e. properties that were priced correctly from the outset).
Reduced properties take twice as long to sell
According to Rightmove, reduced properties take more than twice as long to sell (specifically, Sold Subject to Contract (SSTC)) compared to non-reduced properties. In particular, according to the statistics, non-reduced properties took an approximate average of 40 days to sell, whereas reduced properties took an approximate average of 100 days to sell!
Reduced properties are 10% less likely to sell
According to Rightmove, non-reduced properties behave very differently to reduced properties across a number of metrics. In particular, according to the statistics; the sold rates (specifically, the number of properties SSTC) of non-reduced and reduced properties are an approximate average of 70% and 60% respectively. In other words, reduced properties are 10% less likely to sell compared to non-reduced properties!
Reduced properties have twice as much chance of falling through
According to Rightmove, sales (specifically, once a property is SSTC) of reduced properties are twice as likely to fall through compared to non-reduced properties. In particular, according to the statistics; the fall-through rates of non-reduced and reduced properties are an approximate average of 20% and 40% respectively. Simply put, non-reduced properties have a 20% average chance of falling through after being SSTC, whereas reduced properties have a 40% average chance of falling through after being SSTC!
I need to point out that the non-reduced properties referred to in these statistics were properties that had been priced correctly from the outset when they first came onto the market.
What can we gather from these statistics?
They clearly illustrate the critical importance of getting the price right the first time! In particular, these statistics show the issues that we are likely to face if we choose to price our home above the market value, i.e. overprice our home, to test the market. These issues are of course best avoided altogether.
These statistics also show a clear relationship between price and timing!
How can we ensure to get the price right the first time?
Determining the correct price for our home involves a number of key factors that we must consider, some of which I have listed below. Click on any of the key factors below and join me as I discuss each one in more detail.
The Factors That Influence The Asking Price
Comparable Properties
Saleable Pricing
The Value Of Our Home
The Foundation Of Price
Band Pricing
Getting in touch with me
If you would like to discuss any of the above points with me further, or if you need help or have any questions in general, click here to get in touch with me.
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Credit goes to Rightmove for the images used in this section