Saleable Pricing
Introduction
In a tough and competitive property market, our home needs to present a strong value proposition in order to attract buyer interest and engagement, and ultimately the best offers. Here I discuss saleable pricing, including the critical importance of saleability, and how we can make our home more saleable than the competition.
Buyers buy by comparison
Buyers naturally buy by comparison and pick what they believe is the best choice for them out of all of the properties available on the market. Every buyer will have their own set of criteria in terms of what they believe is the best fit for them, and no two buyers are the same. Whilst our home cannot cater for every criteria of every buyer, one thing is for certain - every buyer wants the most property for their money!
This is where saleable pricing comes in! The saleability of our home plays a key role in our efforts to attract buyer interest and offers, and ultimately securing a sale at the best possible price!
Our home needs to be the most saleable property in the area if we want the buyers to pick it over the competition!
What is meant by saleable?
Before going any further, I want to quell and alleviate your possible concerns, and clarify what saleable is not first and foremost. Saleable is certainly not about underpricing one’s home, pricing it for ‘cheap’, nor is it about racing one’s price to the bottom, simply to secure a quick sale!
Rather, saleable means offering better value than the competition!
Why should we offer better value than the competition?
As mentioned at the beginning, buyers buy by comparison and pick what they believe is the best choice - specifically, the best choice for their money!
If our home offers better value for the money than what the buyer gets elsewhere, then our home will be seen as more saleable than the competition and therefore the best choice for the buyer!
To put it another way, our home needs to present the strongest value proposition, offering the most property for the money compared to the competition if we want our home to be the property of choice for the buyer.
Otherwise, if we choose not to make our home more saleable, then it will likely be regarded as not offering the best value for the money, nor presenting a particularly strong value proposition - leaving buyers to afford it less consideration in favour of competing properties that offer better value, or ignoring it altogether!
In fact, making our home to be the most saleable is key to achieving the best price!
Why is making our home to be the most saleable the key to achieving the best price?
If our home is the most saleable property in the area, i.e. the one that offers the most property for the money, and therefore the best choice for buyers; such a strong value proposition will be tremendously compelling to excite buyers and stimulate their interest to want to come through our door for a viewing! If our home is indeed tremendously compelling, then many buyers will flock to see it!
Only by presenting a strong value proposition are we then able to encourage strong buyer engagement for our home, attracting the strong level of interest, competition and demand we’d need to achieve the best price!
Saleable means helping the buyers to give our home their attention and priority over the competition
From the buyers’ perspective, a saleable property makes their job easier in deciding which property from the choices available in the market that they should give their most attention and priority to. Essentially, we are helping them to give our home their attention and priority over the competition!
From the sellers’ perspective, not only does a property being saleable help to achieve the best price, but is also more likely to sell swiftly or in a timely manner. Otherwise, if our home is not any more saleable than the competition, then buyers will have a more difficult job in deciding which property to give their most attention or priority to, which means that our home is more likely to sit on the market for longer, with its time value diminishing the longer it sits!
One does acknowledge that buyers generally tend to view more than one property before deciding which one to buy, but not all buyers get around to viewing all of the properties that they intend to view for one reason or another. It’s quite possible, for example, that the buyer may decide to buy the third property that they’ve viewed without needing to view the rest of the properties on their list. This decision could be due to a number of reasons, but here I highlight a couple of possible reasons as examples:
The buyer may have decided that the third property fits their needs and sees no reason to expend further time and effort in viewing the rest on their list. It may well have been the case that our home equally fits or was even a better fit for the buyer’s needs, but as it was, for example, the fifth property on their list to be viewed, we’ve lost out on the chance for the buyer to come to view our home.
The buyer may have decided that the third property fits their needs and is unable to view the rest on their list due to time constraints or pressure. Once again, it may well have been the case that our home equally fits or was even a better fit for the buyer’s needs, but as it was, for example, the fifth property on their list to be viewed, we’ve lost out on the chance for the buyer to come to view our home.
Even if the asking price of our home does reasonably draw attention and interest from the buyer who wants to view it, if the price does not make our home any more saleable than the competition, then there’s no telling where the buyer will place it on their list among the other properties that they intend to view. The further down our home is on the list, the less likely the buyer will get around to viewing it for the possible reasons stated above.
It’s worth noting that where our home sits on their list may not necessarily reflect the buyers’ view or preference relative to the other properties on the list. Although it’s possible that buyers may sort their list in order of preference or priority, it’s also possible that buyers simply added properties of interest to their list as and when they saw them and our home just happens to be the fifth property added to the list.
So if our home is not any more saleable than the competition, this means we have not given the buyers any reason to want to put it at the top (or near the top) of their list. The higher our home is on their list, the more likely the buyers will get around to viewing it. And if our home is at the top (or near the top) of their list, then the buyers will most likely view it first, or at least view it before getting around to most of the other properties on the list!
Simply put, pricing our home at fair or market value can reasonably attract buyers and offers without a doubt, but it doesn’t necessarily make our home more saleable than the competition, so we may miss out on some buyers that we could have otherwise attracted with a more saleable/attractive price!
(consider adding this bit above, may edit the above with this paragraph)
So if not all buyers get around to viewing all of the properties that they intend to view, we ought to ensure that our home is one of the earliest, if not the earliest, properties that they come to see. This means giving the buyers a reason to want to put our home at the top of their list to want to view it before viewing the other properties on their list! The more buyers we are able to motivate to want to view our home before viewing the competition, the stronger the buyer engagement is for our home, and in turn, the stronger the interest, competition and demand is for our home! This is why it’s so important that our home should be more saleable than the competition!
Otherwise, even if buyers intend to view our home but it’s not more saleable than the competition, those buyers aren’t necessarily motivated enough to want to view it early before viewing the other properties on their list, which means there’s less of a chance of them getting around to viewing it - consequently, the buyer engagement, as well as the interest, competition and demand for our home won’t be as strong!
How do we make our home more saleable?
For our home to be the most saleable, it needs to be the most attractively priced property of its type. Saleability is ultimately determined by price.
To better understand this, let’s consider the following scenario in the image below.
Let’s assume that there are seven properties in the same area.
Properties 1-3 are the same size, and Properties 4-7 are the size same - but Properties 4-7 are bigger than Properties 1-3.
Properties 1-4 are the same price, say £1,000,000 each, and Properties 5-7 are the same price, say £1,200,000 each.
When only looking at Properties 1-4; Property 4 is clearly bigger than Properties 1-3, making Property 4 the most saleable, since it’s a bigger property for the same price as the other three in the area.
When only looking at Properties 4-7; Property 4 is clearly less expensive than Properties 5-7, making Property 4 once again the most saleable, since it’s a lower price for the same size property as the other three in the area.
In fact, we can see that Property 4 is the most saleable property over the entire competition in the area!
So if buyers were looking to buy in that particular area, then they are bound to flock to see Property 4, allowing its seller to have the pick of the bunch! And since Property 4 is bound to encourage the strongest buyer engagement, and therefore, attract the strongest level of interest, competition and demand in the area, it’s most likely to achieve the best price compared to the competition!
In contrast, since Properties 1-3 and 5-7 do not offer as strong of a value proposition, they’re bound to attract fewer buyers or less buyer interest, and therefore weaker levels of interest, competition and demand, resulting in fewer or no offers!
Hopefully, we can now see why it’s incredibly important to be the most saleable property in the area, otherwise if our home simply fell in line with the competition, with the asking price aligned with theirs, then it will not be any more saleable than the competition. In other words, our home will fail to stand out and fail to excite buyers and stimulate interest, and consequently end up stagnant and stale on the market along with the competition!
Referring back to the scenario, if Property 4 fell in line Properties 5-7, i.e. is priced the same as those three properties, then it is no longer any more saleable than the competition!
For the purposes of these examples, I’ve only discussed saleability relative to the property size. Saleability can also be relative to the presentation of the property, as the value proposition can also be found in the level of presentation on offer.
To better understand this, let’s consider a similar scenario.
Let’s assume once again that there are seven properties in the same area, only this time for the purposes of this particular example, all of the properties are the same size.
Properties 1-3 offer adequate presentation, whereas Properties 4-7 offer superb presentation.
Properties 1-4 are the same price, say £1,000,000 each, and Properties 5-7 are the same price, say £1,200,000 each.
When only looking at Properties 1-4; Property 4 clearly offers better presentation than Properties 1-3, making Property 4 the most saleable, since it offers better presentation for the same price as the other three in the area.
When only looking at Properties 4-7; Property 4 is clearly less expensive than Properties 5-7, making Property 4 once again the most saleable, since it’s a lower price for the same presentation as the other three in the area.
Once again, Property 4 is the most saleable property over the entire competition in the area!
Essentially, a price that is the most saleable is not only the most attractive, but is also a price point that enables us, the seller, the greatest chance of achieving the best price!
The essence of saleability is offering buyers a more accessible price point to engage with, in order to encourage strong buyer engagement and attract the strong level of interest, competition and demand we’d need to achieve the best price. This very idea can also be found in accessible pricing, buyer enquiry pricing, and band pricing, all of which I cover elsewhere in this guide - click the titles to jump to those sections.
Overpricing our home will make it less saleable than the competition, or even not saleable at all
If pricing our home attractively makes it more saleable than the competition, then conversely, pricing our home above the market value, i.e. overpricing our home, can make it less saleable than the competition, or even not saleable at all!
If we choose to overprice our home, then we effectively give the buyers no reason to pick it over the competition. Buyers are not likely to pick our home nor even afford it their attention if they can get a bigger property for the same price, or the same size property for a lower price, elsewhere in the area. Similarly, buyers are not likely to pick our home nor afford it their attention if they can get a property offering better presentation for the same price, or a lower price for the same presentation, elsewhere in the area.
We should therefore avoid overpricing our home altogether.
How do we position/price our home to be the most saleable?
Our home needs to be the most saleable from the buyers’ perspective. In order for us to know how to position/price our home correctly on the market to be the most saleable, we need to be seeing what the buyers see and understand how they would interpret the value of our home. This means looking at both:
Sold comparable properties - buyers want to know what they can reasonably expect to pay for a property of our type.
Available comparable properties - buyers want to know what other choices are available on the market that are reasonable alternatives to our property.
Whilst there is no doubt that purchasing a home can be an emotional decision for buyers, the foundation of their decision on what they’re prepared to pay is fundamentally based on evidence. And so, we need to look at the evidence that the buyers are likely to consider.
We need to discover where our home fits among the comparables in the market
Before knowing where/how to position/price our home to be the most saleable, we need to discover where it fits among the comparables in the market.
The following are the steps we need to undertake to first find out where our home fits among the comparables, and second, where/how we can position/price it to be the most saleable. By undertaking this exercise, we are essentially carrying out a valuation of our home.
Steps for sold comparables
First, we turn our attention to the sold comparables:
We need to compile a list of sold comparables. We can compile this list from the property portals (such as Rightmove or Zoopla).
These comparables ought to be as close or similar to our home as possible, i.e. property type (e.g. detached, semi-detached etc), price range, size, number of bedrooms and bathrooms, and presentation etc).
Location of comparables - I prefer looking at a 0.25 (¼) mile radius, but no more than 0.5 (½), to get the most accurate view of the market in our immediate area.
History of comparables - I prefer looking at the last 6-12 months, but no more than two years, to get the most accurate view of the most recent history of the market in our immediate area.
Once compiled and looking at all of the comparables on the list, we need to decide where our home fits among those comparables. I would first sort the order of the comparables from the most valuable to the least valuable. As a general rule, what makes one property better and/or more valuable than another property usually comes down to location, first and foremost, being the biggest contributor of the value; then size, then presentation (click here to read more about the contributors of value). From there, we then decide where among those comparables does our home fit in. If we look at the example from the image below - let’s say we decide that our home is bigger and in better condition than Property 3 but doesn’t quite match up to Property 4 - in this case, our home should sit in between these two properties.
Based on where we’ve positioned our home, if Properties 3 and 4 were previously sold for £1,400,000 and £1,600,000 respectively, then we can reasonably assume that the price of our home falls somewhere in between.
Therefore, by looking at the sold comparables only, we can reasonably assume (on the surface for now) that our home can be priced at around £1,500,000.
In a previous section, I explained that sold comparables are relative evidence, i.e. relative to the time and market variables in which they were sold; and that sold comparables are only one piece of the puzzle that should be looked at together with other evidence, particularly available comparables (another major piece), in order to get the best picture of our property’s value and asking price.
It’s helpful to consider comparables from more than one angle. As I also explained in a previous section; sold and available comparables are opposite sides of the same coin: sold comparables are historical evidence of achievable price, whereas available comparables are current evidence of unachievable price.
Steps for available comparables
And so, we next turn our attention to the available comparables:
We need to compile a list of available comparables. Once again, we can compile this list from the property portals.
Once again, these comparables ought to be as close or similar to our home as possible, i.e. property type (e.g. detached, semi-detached etc), price range, size, number of bedrooms and bathrooms, and presentation etc).
Location of comparables - once again, I prefer looking at a 0.25 (¼) mile radius, but no more than 0.5 (½), to get the most accurate view of the market in our immediate area.
And much like what we did before with the list of sold comparables, once compiled and looking at all of the comparables on the list, we need to decide where our home fits among those comparables. Once again, I would first sort the order of the comparables from the most valuable to the least valuable, before deciding where among those comparables does our home fit in. If we look at a similar example from the image below - let’s say we decide that our home is bigger and in better condition than Property 3 but doesn’t quite match up to Property 4 - in this case, our home should sit in between these two properties.
One may assume at this point that our home can be priced at around £1,500,000, since it sits in between Properties 3 and 4, priced at £1,400,000 and £1,600,000 respectively. However, such a price point isn’t perhaps accurate to the true market value of our home.
In a previous section, I explained that available also means unsold - meaning that available comparables are properties that remain on the market unsold at the asking prices that they’re listed for. For this reason, we should not be looking to align our asking price with those of Properties 1-6, i.e. the competition, as those asking prices have failed to sell, showing that they do not reflect the true market value of those properties. If we were to price our home in alignment with the competition, then it wouldn’t be any more saleable than the competition! In fact, our home would be equally unsaleable as the competition and most likely follow suit in being left unsold, and growing stagnant and stale on the market! So if Properties 3 and 4 remain unsold and therefore unable justify their asking prices of £1,400,000 and £1,600,000 respectively - then to price our home at £1,500,000 to be in alignment with their asking prices cannot be justified as a saleable price!
So rather than aligning our asking price with those of the competition, we should instead be shifting our home to a more appropriate position in the market, so that our home becomes more saleable than the competition. If we look at the example from the image below, we can see that our home has been shifted to be on par with Property 3. Since Property 3 remains unsold and therefore unable justify the asking price of £1,400,000, it may be the case that the next property up, which is our home, is more worthy of the £1,400,000 asking price. At £1,400,000, our home would be more saleable than Property 3, since it's a better property for the same price as Property 3. In fact, at this price, our home would be the most saleable property over the entire competition (i.e. Properties 1-6) in the area! The competition being overpriced will only serve to make our home appear far more attractive to the buyers! If we want to make our home even more saleable, we can shift it slightly further in the market to £1,300,000!
Therefore, by looking at the available comparables only, we can reasonably assume that our home can be priced at around £1,300,000-£1,400,000.
Now that we have arrived at the value and asking price of our home from looking at the sold and available comparables separately, we have essentially looked at the properties that we can reasonably assume that the buyers will consider and compare alongside our home.
And when looking at the sold and available comparables together to get the best picture of our property’s value and asking price, it would seem that pricing our home at around £1,300,000-£1,400,000 would make it the most saleable property over the competition!
At that attractive, and therefore saleable price, our home will clearly present the strongest value proposition, offering the most property for the money compared to the competition!
If buyers were looking to buy in this particular area, then they are bound to flock to see our home, allowing us to have the pick of the bunch! And since our home is bound to attract the strongest buyer engagement, and therefore the strongest level of interest, competition and demand in the area, it’s also most likely to achieve the best price compared to the competition!
If we are pricing our home at around £1,300,000-£1,400,000, does this mean that we are looking to sell for around that price?
No, that is certainly not the purpose of saleable pricing. The pricing strategy is not about selling our home for less than its true market value.
Saleable pricing is about encouraging strong buyer engagement and our ultimate objective is very much to achieve the best price.
Strong buyer engagement is what brings the strong level of interest, competition and demand we’d need to achieve the best price. And to receive strong buyer engagement, we have to give the buyers something to be excited about!
Rather than listing our home at a fixed price, if we want to make it clear to the buyers that we’re expecting to sell for a higher price, we can certainly list it at, for example, ‘Offers Over £1,400,000’ or ‘Offers in Excess of £1,400,000’.
Extra factors to consider of comparables
I explained earlier that, as a general rule, what makes one property better and/or more valuable than another property usually comes down to location, then size, then presentation - click here to read more about the contributors of value.
When deciding which better properties are better and/or more valuable for the purposes of sorting the order of the comparables from the most valuable to the least valuable, it’s worth also considering the following extra factors.
Extra factors of sold comparables
Factor A - Location
We should consider the location of our home relative to the comparables. Generally speaking, a property referred to as being in a more desirable location usually means that compared to its comparables, it is:
Located in or closer to a quiet, peaceful, well-maintained and safe area, and/or a strong community; or a prime or in demand area.
Closer to local amenities, schools, transportation links, and/or a city centre or hub etc.
Clearly, if our home is in or closer to a desirable location compared to the comparables, then it is more valuable than the latter. Conversely, if our home is further away from a desirable location compared to the comparables, then it is less valuable than the latter.
Factor B - Market and History
How long have the comparables been on the market before they were sold?
Were the comparables sold at the initial asking price, or at a reduced price?
If the comparables had a price reduction, were they reduced once or had successive reductions before they were sold?
And how much were they reduced each time?
The general rule of thumb is that, the shorter the time frame between the point in which the comparable property came onto the market to the point in which it was sold, the more valuable it is. And the longer the time frame, the less valuable it is.
Also, a comparable property that was sold for its initial asking price generally tends to be more valuable (or at least, perceived to be more valuable) than a comparable property that was sold only after a price reduction, but especially after successive price reductions!
Extra factors of available comparables
Factor A - Location
The same point discussed above regarding sold comparables also applies to available comparables.
Factor B - Market and History
How long have the comparables been on the market for?
Have the comparables been reduced?
If the comparables had a price reduction, were they reduced once or had successive reductions?
And how much were they reduced each time?
The general rule of thumb is that, an older comparable property on the market is less valuable than one that is more recent on the market (especially if the older property has had a price reduction or successive reductions), partly due to diminishing buyer confidence from social proof affirmation.
Undertaking your own valuation
From the sellers’ perspective, it is certainly understandable to want to achieve the best possible price for our home, and it can be difficult to not be influenced by our own sentiment and bias when trying to determine the value and asking price. However, it is this very sentiment and bias that can hinder ourselves from selling for the best price, or from selling at all!
A good agent can carry out a valuation of a property that’s reasonably accurate within the range of its true market value. However, as the homeowner and seller, you are the best person to know your own home. For this reason, I would strongly recommend, as an extremely useful exercise, for you to undertake your own valuation based on the steps that I have detailed above, so that you can see with your own eyes the evidence that supports the value of your own home.
Why should I undertake my own valuation if an agent can do it for me?
Even if an agent carries out a reasonably accurate valuation, it may still be disputed by the seller, especially if one is strongly influenced by their own sentiment and bias and/or has not seen all of the evidence that the agent has seen.
If the seller undertakes their own valuation that’s supported by clear and attainable evidence, then they cannot dispute their own valuation. Any seller will find a valuation more compelling if it is first hand information, rather than secondhand information presented by the agent.
As the agent, will you still carry out the valuation for me?
Of course!
Our job is to make sure that we arrive at the most accurate valuation and this can be better achieved looking at the value of our home from more than one perspective.
We will carry out the valuation on our end as well, so that you, the seller, can understand the value of your own home from both perspectives, i.e. yours and ours! By being able to look at both sets of valuations carried out by the seller and the agent, we can look to identify where the similarities and/or discrepancies lie between the valuations, to help us arrive at the most accurate valuation!
So rather than you, the seller, simply being presented with secondhand information prepared by the agent - valuations work best as a team effort between the seller and the agent!
In Step 1 of the exercise above, I suggested that we needed to compile lists of sold comparables and available comparables from the property portals (such as Rightmove or Zoopla). You may choose to compile these comparable lists yourself, or to make your job easier for you, I can provide you with these comparable lists with our Best Price Guide or Comparables Report.
Click here to get in touch with me to request for a Best Price Guide or a Comparables Report!
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.
In order to determine where our home fits among the comparables in the market, we need to understand its value and how valuable it is compared to those comparables. This means that we need to consider the contributing factors that make up the value of our home.
So if you want to understand the value of our home, particularly the contributing factors that make up its value, come join me in the next section.